Coupons and cash: Mobile-payments services go all out to get HK users

Alibaba-owned Alipay has topped 1 million users in Hong Kong, but the perk-rich competition to gain loyal users is far from over.

(from left) Eric Jing, CEO, Ant Financial; Canning Fok, group co-managing director, CK Hutchinson and Jennifer Tan, CEO, APSHK Joint Venture.
(from left) Eric Jing, CEO, Ant Financial; Canning Fok, group co-managing director, CK Hutchinson and Jennifer Tan, CEO, APSHK Joint Venture.

An event yesterday touting a milestone of 1 million Alipay users in Hong Kong highlights an ongoing, all-out mobile-payments marketing scramble taking place.

During the Chinese New Year festivals last month, for example, WeChatPay and Alipay spared no effort to raise their profiles by rewarding their users. A WeChat user who spent HK$25 (US$3.19) or above at McDonald’s would receive a HK$10 (US$1.28) rebate. Each user was able to enjoy the promotion once a day and redeem a total amount of HK$150 (US$19.13) during the 15-day promotion period.

Users of Alipay, on the other hand, received a stamp for their spending on the mobile app or top-ups at 7-Eleven stores (one stamp per day) while three stamps were equivalent to a HK$5 (US$0.64) cash voucher at 7-Eleven. More enticing, all new Alipay users receive a HK$50 (US$6.38) cash reward in the service's ongoing campaign to get downloads and nurture users.

“If I tell you that we have over 1 million users, you can easily estimate how much we have spent to recruit new users,” Jennifer Tan, CEO of APSHK Joint Venture, said at the Alipay event Thursday. APSHK Joint Venture was founded last September by Ant Financial and CK Hutchinson to develop the Alipay service in Hong Kong.

Meanwhile, WeChat Pay is reported to have spent about HK$35 million (US$4.46 million) to recruit new users in Hong Kong.

Tan confirmed that Alipay has indeed reached a user base of more than 1 million since entering Hong Kong in May last year. The mobile payment service is currently accepted in over 10,000 participating merchants, including CK Hutchinson-owned retail brands including ParknShop, Watsons and Fortress. About 80% of the participating merchants accept both Alipay Hong Kong and Alipay China wallet.

“Our mandate is to make Alipay Hong Kong the number one service and lifestyle app, just like in China," said Tan. "We also hope that the Alipay Hong Kong wallet will be accepted overseas and in China someday.”

Tan said Alipay is strategically poised to excel with its capabilities suite and joint venture with CK Hutchinson. She disagreed that the partnership with the conglomerate was a channel for Alibaba to gain consumer data in Hong Kong. “There are data privacy restrictions in Hong Kong, that’s not our intention," she said. "The most important reason for us to partner with CK Hutchinson is to make Alipay part of the lifestyle of the consumers.” Alipay Hong Kong currently supports bill payment functions and offers basic insurance services. 

Apple Pay ranked as the most popular wallet in Hong Kong in a recent survey by JD Power, which said the iOS wallet is used by 29% of respondents. The 2018 Hong Kong Retail Banking Satisfaction study reported that Alipay was used by 15% of the respondents.

The Hong Kong Monetary Authority is expected to launch the Faster Payment System in September this year to faciliate the growth of mobile payment services. Tan contended that competition is healthy as the market in Hong Kong gets more crowded with new players such as the Tap & Go wallet. 

"As a global city, Hong Kong cannot afford to be lagging behind in mobile payment," Tan said. "In fact, we began cashless payment fairly early with the Octopus card. Fintech is developing at such a fast pace. Even though countries like Thailand, Singapore and Malaysia had not started mobile payment early, they have been quite ahead." 

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