Unlike people in the US who like to make payments using a credit card, mobile payments, specifically Alipay and WechatPay, dominate the digital payment market in China. Mobile payment has become the top preferred way of daily transactions between customers and sellers. Even the smallest merchant on the street has a QR code in their store, and people just scan with their phones to make the payments. In the news, homeless people in China always bring a QR code to collect alms. According to the news agency Xinhua, in the first 10 months of last year, China processed a whopping $12.8 trillion in mobile payments, which is 38% higher than for all of 2016.
Not only the payments but also the investment in China has a trend of toward the digital. Similar to other digital payment apps in China such as Meituan Pay, both Alipay and WeChat are “super apps”, which means customers can install and open “mini-programs” inside these two apps. The “app-within-an-app” concept was introduced by these two companies that attempted to create an ecosystem around the apps themselves. One major mini-program is called “Yu’eBao” in Alipay, which means “leftover treasure”. People always have a small amount of money left in the digital wallet, and they can put the money in the “Yu’e Bao” as an extra investment opportunity. “Yu’eBao” became the world’s largest money market fund in 2013. Currently, Yu’E bao had 1.03 trillion yuan in assets under management at the end of June or an equivalent of $144 billion based on exchange rates.
A few months ago, China announced its digital RMB or e-CNY to the public. It was issued by China’s central bank, the People’s Bank of China. It is the first digital currency to be issued by a major economy. The digital RMB is legal tender and has equivalent value to the other forms of CNY. Although there is no much info about it, with e-CNY introduced, Alipay and WeChat pay are facing new competition in China.
E-COMMERCE WITH LIVE STREAMING
China is the world’s largest e-commerce market, propelled by e-commerce subsidiaries of Alibaba Group, include Taobao, and Tmall, plus competitors JD.com and Pinduoduo. According to reports, around 710 million people shopping digitally in China, and consumers in China will spend around $3 trillion online this year, which is more than 50% of retail sales.
In recent years, a new form of e-commerce becomes popular in China – live streaming e-commerce. Livestreaming e-commerce is promoting and selling goods through influencer streams on their own social media channels, including social media platforms such as Douyin, the Chinese version of Tiktok, and e-commerce platforms such as Taobao, the Chinese version of eBay. Products featured are primarily cosmetics and beauty aids, fashion, and foods, but sometimes the rocket and the house too. The two most famous live streamers/influencers are Jiaqi Li, also known as the “Lipstick King”, “a former L’Oreal, physical retail salesman who is now worth a reported $5 million” and Wei Ya, who promotes to send a small payload into space for the Chinese company Casi Rocket Technology at $6.1 million. In 2020, Wei Ya set a record high sale worth 5.32 billion RMB within 1 day, and Jiaqi Li set a record high sale worth 3.87 billion RMB within 1 day.
Not only the influencers but also world well-known retailers started to enter the live streaming e-commerce market in China recently. Estee Lauder’s live stream sells an estimated $300 million of products on “Singles Day 11/11” with a 2 for 1 discount. Tiffany and Hermes are also turning to the sales channel. Tiffany sold over 300 necklaces with each worth 3500 dollars within hours of live streaming. Lanvin and Louis Vuitton have also launched live streaming promotions in China.
Lastly, the digital art world. Originally from Tokyo, Japan, TeamLab created a digital wonderland in Shanghai, China, an immersive clubbing experience that connects humanity with the digital world. TeamLab Borderless Shanghai has a 6600 square meters space with around 50 digital art areas, including the ones first introduced to the world. The exhibition space doesn’t have any maps, and people can walk around inside the different areas. The exhibition is called a “new social entertainment model” and delivers experiences that are enlivened by “3-D objects” around the space people into.