China Businesses in Digitization Rush Post COVID-19

Business Uncategorized

Businesses in China are more focused on digitising their operations following the Covid-19 outbreak, with as many as 72% of SMEs having resumed full operations as of 24 March 2020. This builds on the findings of the 2019 Q4 Chinese Mobile Payment Market Report by market research firm iResearch, which highlights the maturity of the Chinese mobile payment market and the high penetration rate of mobile payments that made it a norm in the population’s daily lifestyle.

According to the report, Chinese mobile payment market grew to RMB 59.8 trillion (RM 36.63 trillion), representing a 13.4% year-on-year increase. Popular mobile payment solution service providers, Alipay and Tenpay (owner of WeChat Pay + QQ Wallet), continue to maintain their market dominance in the country, with Alipay’s market share of transaction volume reaching 55.1% in the quarter.


The report also states that the transaction volume of offline scan-to-pay increased to RMB 9.6 trillion (RM 5.88 trillion), a month-on-month increase of 11.6%, thanks to integrated marketing from online to offline channels during 11.11 and 12.12 shopping festivals. The proliferation of scan-to-pay is beneficial to further cultivate user stickiness while increasing user value in high-frequency, multiple offline mobile payment use cases.

Changing Retail and Lifestyle Culture

China’s demand for digital lifestyle services has seen an increasing number of people seeking such services online in 2019. The report states that the number of these searches within the Alipay app alone, increased by 300% compared to 2018.

Brands and companies have been quick to respond to such developments. For example, Beijing-based grocery startup Meicai, which connects farmers with consumers and restaurants, launched a mini program to make its delivery services available to Alipay users. Within one week, the mini program attracted more than 800,000 new users and saw orders pour in from across 80 cities in China.

Ten cinema chains in China on the other hand, migrated their offline ticket offices across 400 cinemas to the Alipay platform and launched a dedicated presale ticket campaign together in twelve major Chinese cities on 18 March. In just one week, the number of presale movie tickets sold increased by over 2000%, compared to the previous week. 

Government Support to Spur Domestic Consumption

Since March, over ten provincial and municipal governments have launched incentive programs to bolster the recovery of various sectors, including catering, culture and tourism, and fitness. This includes stimulating domestic consumption and helping consumers and businesses in need, through digital coupon distribution.

For instance, Hangzhou, the capital of Zhejiang Province, plans to distribute RMB 1.68 billion (RM 1.03 billion) worth of consumption coupons to support more than 6 million local offline merchants, across a wide range of sectors including retail and catering. Whereas the local government of Nanjing, the capital of Jiangsu Province, has distributed RMB 318 million (RM 194.96 million) worth of coupons for consumers to redeem for the purchase of foods, books and supporting local tourism. The coupons are also aimed at providing welfare aid for low-income communities. These coupons could be applied through the local public service app ‘My Nanjing’ and can be used when making payments via Alipay.

China’s efforts serve as an example of how economies and industries around the world can sustain themselves during restricted movements or lockdowns and, rebound quickly after the pandemic by leveraging mobile payment options and encouraging the digitisation of business models. This will require expanding the reach and opportunities of mobile payment to more members of society and greater support and incentives by relevant government authorities.