Mobile Payment Apps Drive O2O Commerce in China - eMarketer

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Mobile Payment Apps Drive O2O Commerce in China

August 3, 2016

Nishtha Mehta
Founder & Chief Instigator
CollabCentral Consulting

eMarketer: Why are mobile payment apps driving usage of O2O services in China?

Nishtha Mehta: Both WeChat Pay and Alipay enable payment and restrictionless shopping, whether from online to offline or offline to online. They act not just as a payment gateway but as an entire ecosystem.

eMarketer: How can marketers decide which mobile payment app to partner with?

Mehta: Sometimes you have to align both with Tencent and Alibaba, depending on the size of the marketer. But first, you have to figure out where you are already aligned and where the ecommerce assets are that you can leverage. Major marketers have dual strategy. They use O2O across [Alipay and Tencent], because their consumer base is scattered across both.

WeChat has advantages over Alipay. You can run HTML campaigns and integrate with your CRM [customer relationship management] programs. With Alipay, you can shop, receive offers and browse through brand sites, but the CRM and customer service options on WeChat are far superior. You cannot have a copy-and-paste strategy for Alipay and WeChat.

“O2O is much bigger than ecommerce. It’s embedded in the entire marketing journey.”

eMarketer: How quickly are retailers adapting to consumer take up of O2O and mobile payment apps?

Mehta: Tier 1 retailers are leading on the O2O adoption curve. But adoption is moving faster in Tier 2 and Tier 3 retailers, because penetration of WeChat and Alipay is already high in Tier 1. Adoption is low in some of the lower tiers, but it’s increasing fast as merchants like Carrefour, Tesco and low-tier shopping areas integrate WeChat and Alipay. We already see a big change from last year vs. this year.

eMarketer: Are most marketers coming to grips with the O2O concept and learning how to leverage it?

Mehta: There is a much clearer understanding of what O2O means now compared to a year ago. O2O is much bigger than ecommerce. It’s embedded in the entire marketing journey. It goes from a banner mobile ad and links you directly through Wi-Fi, Bluetooth or coupons to an offline offer.

The focus now is making marketers willing to try new technologies or new approaches, whether it’s O2O or another innovation. It doesn’t matter if it’s an established approach or a proven business model. Invest in experimenting, and see what works for your brand. Very few marketers do this.

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