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Ant Financial Rebrands Lazada's Payments Service as Alipay

The move is the latest advance by the Alibaba affiliate into Southeast Asia’s payments sector

April 20, 2017 | Retail & Ecommerce

Alibaba affiliate Ant Financial has made yet another move in Southeast Asia, this time by merging its Alipay digital payment platform with the helloPay Group, a payment service subsidiary of ecommerce company Lazada Group. The merger is not unexpected, given that Alibaba bought a controlling stake in Lazada Group for $1 billion in 2016.

Ant Financial released a statement indicating that it planned to rebrand the helloPay service as Alipay in the four countries in which it currently operates—Indonesia, Malaysia, Singapore and the Philippines. The service will now be known as Alipay Indonesia, Alipay Malaysia, Alipay Singapore and Alipay Philippines, depending on the market.

However, the change is really in name only.

helloPay’s features and services will remain unaltered for now, and the rebranded service will not be folded into Alipay’s mobile app, which Ant Financial claims has about 450 million users.

For the time being, Ant Financial seems content to get Lazada customers used to the name Alipay. But it is very likely that some version of an Alipay mobile app will eventually launch in these markets, especially given that helloPay—while closely integrated with Lazada’s ecommerce platforms—did not offer customers a mobile app of its own.

One sign that Ant Financial is taking the improvement of Lazada’s existing digital payments services seriously is that it plans to relocate the helloPay team to its Singapore offices.

Ant Financial has already had significant success with Alipay in China, and is clearly looking to reproduce the app’s achievements in Southeast Asia.

According to Analysys International Enfodesk, the Alipay mobile payment app had 432.0 million active users in China in Q4 2016.

Active* Mobile Payment App Users in China, by Service Provider, Q4 2016 (millions)

While that was several hundred million fewer users than the 838.3 million reported for Tenpay, the payment system operated by WeChat parent company Tencent, Alipay is still arguably the more successful of the two in some important ways.

For example, Alipay was responsible for 54.1% of mobile payment transaction value in Q4 2016, a substantially higher share than Tenpay’s 37.0%, Analysys International Enfodesk found. That means that while Tenpay might have more users, Alipay’s users are either using it more often or for higher-value transactions—or both.

Alipay was also the only payment app to crack a list of the top five most frequently used apps in China in a survey by the China Internet Network Information Center (CNNIC), finishing in fifth place. The other most frequently used apps were messaging platforms WeChat and QQ, Taobao Marketplace and Baidu’s search engine app.

Alipay’s success lies partly in its closely-knit nature with Alibaba’s ecommerce platforms. But it has also worked well in China because it can use QR codes to process offline payments without the need for vendors to have payment terminals.

Ant Financial’s experience getting historically underbanked and unbanked consumers in China to migrate to digital payments systems is likely to translate well to markets in Southeast Asia with large populations and little traditional banking exposure.

The company has not been shy about its designs on expansion in the region, either, having recently plowed investments into digital payments services BlackBerry Messenger service in Indonesia.

Rahul Chadha

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