1 DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
August2,2017
Baidu Forms Strategic Partnership with PayPal Targeting Overseas Payment Market
1) PayPalannouncedthatithasformedastrategicpartnershipwithBaidu,whichwillallowPayPal’sglobalmerchantstoacceptpaymentsfromBaiduWalletusers.
2) ThestrategicmoveshouldhelpBaiduWalletbetterpositionitselfintheoverseaspaymentmarket.Intermsofmobilepaymentdevelopment,BaidulagsbehindinthedomesticmarketwhereAlibabaGroupaffiliateAntFinancialandTencentdominate.
3) ThepartnershipwithBaidushouldfurtherincreasePayPal’sappealtoglobalmerchants.PayPalalreadypartneredwithUnionPaylastyeartoallowglobalmerchantstoacceptpaymentsfromChinesecustomers.
BaiduFormsStrategicPartnershipwithPayPaltoTapOverseasMobilePaymentMarketThestrategicpartnershipbetweenPayPalandBaiduwillenableroughly17millionPayPalmerchantstoacceptpaymentfromBaiduWalletusersbeforetheendof2017.ThatmeansChineseconsumerscanpayusingtheirBaiduWalletandPayPalatmerchantsoutsideofChina.GiventhemultitudeofoptionsChineseconsumershavetobuyfromPayPalmerchantsintheUS,thepartnershipwilleventuallyexpandPayPal'sentireglobalmerchantbaseoutsideofChinaanddrivedemandincross-bordertradeoverthePayPalplatform.
OurTake:ThePartnershipCouldBenefitBaiduMoreThanPayPalPartneringwithPayPalontechnologyandproductinnovationshouldenhancethecross-borderconsumerexperienceforBaiduWalletusers.Weviewthisstrategicmoveaspositive,asitwillallowBaiduWallettocatchupwiththeleadersinthedomesticmarket,Tencent’sWeChatPayandAntFinancial’sAlipay.The100millionmonthlyactiveusers(MAU)ofBaiduWalletonlyaccountedfor0.36%ofChina’smobilepaymentmarketbytransactionvolumeinthefirstquarterof2017.
AsPayPalhadalreadypartneredwithUnionPaylastyeartoallowglobalmerchantstoacceptpaymentsfromChinesecustomers,thisnewpartnershipshouldfurtherincreasePayPal’sappealtoglobalmerchantsandbroadentherelevanceofPayPal’splatform.
2 DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
August2,2017
Catch-UpTimeforBaiduWallet,BothDomesticallyandOverseasBaiduWallettrailsbehindTencent’sWeChatPayandAntFinancial’sAlipay,bothathomeandoverseas.
TheDomesticMarketBaiduhadamere0.36%oftheChinesemobilepaymentmarketinthefirstquarterof2017,clearlybehindtheleaders—Alipaywith53.7%andWeChatPaywith39.51%—accordingtomarketresearchfirmAnalysys.OwingtothelargeuserbaseoftheWeChatandQQmessagingplatforms,ChineseconsumersfrequentlyuseWeChatPayforawidearrayofdailypayments,rangingfromride-hailingservicestoshopping.Alipay,ontheotherhand,isthekeypaymentmethodforChina’slargeste-commerceplatformTaobao.BothWeChatPayandAlipayarebackedbysolidplatforms,whileBaiduWalletstilllagsfarbehind.
Figure1.MarketShareoftheChinaMobilePaymentMarketin1Q17,byTransactionVolume
Source:Analysys/FGRT
OverseasMarketIntermsofoverseasexpansion,BaiduisalsolaggingbehindAntFinancialandTencent.
AntFinancial:TheAlibabaGroupaffiliatehasalreadypurchasedanumberofpaymentfirmsglobally,asshowninthechartbelow.AntFinancial’sglobalizationstrategyistoprovideChinesetouristswiththesameseamlesspaymentexperiencethattheyalreadyhaveinthedomesticmarket.
Source:antfin.com
Alipay53.70%
WeChatPay39.51%
BaiduWallet0.36%
Alipay WeChatPay
1qianbao lianlianpay
UPayWallet YeePay
KuaiQian BaiduWallet
Others
3 DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
August2,2017
Figure2.OverseasInvestmentActivitiesofAntFinancial
Date Target Market BusinessofTargetCompany Activity
Jan2015 Paytm India Electronicpaymentande-commerce
Investmentandtechnologyexchange
Nov2015 M-Daq Singapore Forexproducts Investment
Nov2016 AscendMoney Thailand Electronicpayment Investmentand
technologyexchangeFeb2017 KakaoPay Korea Electronicpayment Investment
Feb2017 Mynt Philippines Electronicpaymentandmobileloan
Investmentandtechnologyexchange
Mar2017 Emtek Indonesia Media Jointventure
Mar2017MaybankandCIMBBank
Malaysia Banking IntroducedAlipayinMalaysia
Apr2017 Hellopay Singapore Electronicpayment Merger
Apr2017 Moneygram US Electronicpayment Acquisition
Source:Techcrunch/Crunchbase/iresearch/TechinAsia/FGRT
Tencent:WeChatPayhasalsoformedseveralpartnershipswithglobalpaymentfirms.Tencenthasinvestedin:Hike,amessagingplatform;Flipkart,aleadinge-commercewebsiteinIndia;andpartneredwithCitconintheUStoenablemerchantstoacceptpaymentsfromChinesetravelers.Mostrecently,TencentappliedforaMalaysianpaymentslicenseearlierinJuly.
Source:tencent.com
4 DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
August2,2017
DeborahWeinswig,CPAManagingDirectorFGRTNewYork:917.655.6790HongKong:852.6119.1779China:[email protected]
SimicChanSeniorResearchAssociate
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