(Yicai Global) July 21 -- Apple Inc. [NASDAQ:AAPL] started offering discounts in China the other day in hopes of snatching up mobile payment market share, but the company may have missed the ideal time to do so, insiders told Yicai Global.
Apple announced a few days ago that clients using Apple Pay in selected shops in mainland China would be able enjoy markdowns of up to 50 percent and as much as 50 times the usual amounts of reward points for credit cards.
The promotion attracted dozens of stores and e-business giants such as JD.com Inc. [NASDAQ:JD] and Ctrip.com International Ltd. [NASDAQ:CTR]. However, Apple missed the best timing to expand its mobile payment market presence in China, UnionPay Smart Chief Executive Long Kai said.
Tencent Holdings Ltd.'s [HKG:0700] WeChat Wallet and Alibaba Group Holding Ltd.'s [NYSE:BABA] Alipay currently dominate the Chinese market.
The transaction scale of China's third party mobile payment market reached up to USD278 million (CNY1.88 billion) in the first quarter, increasing 47 percent over the previous quarter, an Analysys Ltd. report shows. Alipay and WeChat Wallet cornered more than 93 percent of the market.
"NFC [Near Field Communication] is a common payment technology that was adopted not only by Apple, but also by many Android mobile phones," said
Chen Yuemeng, founder and chief executive of intelligent wearable device manufacturer Shanghai HicLing Technology Co. "But once users' payment habits were developed, they became hard to change. WeChat and Alipay started offering subsidies earlier, and users have established their habits."
As the leader in NFC industry, Apple Pay entered the Chinese market on February 28, 2016. Its competitors, Alipay and WeChat Wallet, acquired users by offering 'e-bonuses' through QR code payment. Apple Pay has not gained much traction in China.
Aside from promos offered by Alipay and WeChat Wallet to early adopters, the dominant status and indispensability of the internet ecosystem behind the two payment systems led to their widespread adoption, insiders said. Alipay is supported by Alibaba's e-business and online-to-offline systems, while WeChat Wallet is supported by the most frequently used social network in China.
Apple decided to offer perks to boost enthusiasm about its mobile payment system, said Gartner Inc. Chief Research Officer Shen Zheyi. Under the current circumstances, it is almost impossible for Apple Pay to catch up with WeChat Wallet and Alipay, Shen said.
Apple started cooperating with its Chinese partner, China UnionPay, before Alipay and WeChat Wallet did. UnionPay worked with Apple Pay, Samsung Pay, Mi Pay and Huawei Pay on NFC functions from 2012.