67% of Chinese online purchases are made through eWallets, most popular – cash on delivery only 5%

The Chinese online payment market is dominated by eWallets instead of cards. Alipay and Tenpay are the two eWallets which have by far the largest market share, respectively around 48% and 19%. MasterCard and Visa are almost to neglect in terms of market share in China, according to the “China B2C E-Commerce Report 2016”  released by the Ecommerce Europe.

The Ecommerce Europe annual report gives a promising outlook for the Chinese e-commerce market, given that China has the highest eGDP in the world, the e-commerce share of GDP being at 7.05%. The B2C e-commerce growth rate has dropped slightly, but remained relatively high, with the B2C e-commerce revenue and growth rate of for total online sales of goods and services forecast to reach $975,000 million this year.

China is becoming one of the major players in e-commerce, but almost half of its population does not have access to the internet (49%). The lack of knowledge about computer and/or networks is the most common reason for not using the Internet. Yet, interestingly, the percentage of Internet users amongst those 60 years and older has doubled since 2013.

Only 51% of the population is connected to the Internet – even though China has more than 400 mil. e-shoppers, representing 70% of the online population of 15+.

Even though Internet penetration is comparatively low, almost 75% of the Chinese population uses smartphones, with a total of mobile sales of $383bn in 2015, and more than half of online sales are expected to be made through mobile devices in 2016.

The Chinese online payment market is dominated by eWallets instead of cards. Alipay and Tenpay are the two eWallets which have by far the largest market share, respectively around 48% and 19%. MasterCard and Visa are almost to neglect in terms of market share in China. The Alipay “scheme” has around 550 million wallet users (compared to PayPal with around 188 million worldwide) and provides an escrow payment service.

Sellers get their money as soon as the buyer confirms receipt of goods. After 7-10 days without buyer confirmation, the seller automatically gets paid. Alipay has a cross-border e-payment service which allows non-Chinese businesses to accept Alipay and payments in Renminbi (the Chinese currency).

eWallets are the most popular online payment method in China

Besides Alipay and Tenpay, merchants are recommended to accept the payment method UnionPay as well. UnionPay (state-owned) is the largest card scheme in the world with over 3.5 billion cards issued. Around 330 million are credit cards (a slight portion is co-branded with MasterCard and Visa). UnionPay’s Online Payments (UPOP) is the name for their online transactions. When checking out with UPOP, the shopper can choose a debit, credit or prepaid card payment, or a direct debit from the shopper’s bank account.

Source: www.ecommerce-europe.eu