(Yicai Global) Dec. 13 -- China's major payment providers have expanded their presence in Southeast Asia, as they look to capitalize on the region's position as the most popular destination among Chinese tourists.
The country's two biggest online payment platforms Alipay and WeChat Pay have aggressively expanded south through cooperation with local units and investments.
Alipay, run by Chinese internet behemoth Alibaba Group Holding Ltd.'s [NYSE:BABA] payment arm Ant Financial Services, deploys its services in nearly 10 countries in Asia. The Hangzhou-based firm held overseas promotions yesterday in Hong Kong, India, the Philippines and Thailand as part of the Double 12 festival, through versions of its product set up via local partners.
Double 12 is a 24-hour online shopping event held on Dec. 12, similar to last month's Singles' Day event.
Alibaba's rival Tencent Holdings Ltd. [HK:0700] acquired Thai web portal Sanook Online Ltd. late last year and rebranded it Tencent Thailand. The unit will serve as a platform for Wechat Pay's expansion into Southeast Asia.
The Shenzhen-based firm has also applied for a payment service license in Malaysia so that local users can bind their bank accounts to WeChat Pay and directly use Malaysian ringgit to pay for goods and services.
Another Chinese internet titan Baidu Inc. [NASDAQ:BIDU] rolled out its third-party payment service Baidu Wallet in Thailand in April last year, and partnered with PayPal Holdings Inc (NASDAQ:PYPL) in July to pursue expansion into overseas markets.
China's e-commerce heavyweight JD.com Inc. [NASDAQ:JD] will expand into the region initially in online shopping before exploring payment services. The firm set up a joint venture in Thailand last month with local conglomerate Central Group focused on Southeast Asia's online retail sector.
WeChat reported record numbers of users going abroad during this year's Golden Week national holiday in October, with Southeast Asia the most popular destination. Alipay saw payments among overseas users grow more than seven-fold during the holiday period with per capita spending reaching CNY1,480 (USD223).
The region's e-commerce market is currently valued at USD50 billion and could grow to USD100 to 150 billion by 2025, a report from McKinsey says, offering vast opportunities for payment players. Mobile advertising businesses in the six major economies of Indonesia, Malaysia, Vietnam, Thailand, Philippines and Singapore are expected to reach USD1.4 billion in value in 2018 and over USD2 billion in 2020.
Most Chinese third-party payment platforms remain focused on Chinese tourists and residents in Southeast Asia at present as the adoption of mobile payments among the local population remains in a stage of infancy.