China’s e-commerce leader has big ambitions. Since its launch in 2004, Alipay has quickly become China’s most popular third-party online payment service. With a commanding market share in place, Alipay has looked to diversify beyond online transactions in China. Alipay recently revamped its mobile payment solution, and the company seeks to enter new foreign markets. There is little doubt that Alipay is positioning itself to be a global leader in online payment services.

1. Alipay: The E-Commerce Dragon Beyond the
Great Wall
February 2014

2. Alipay: The E-Commerce Dragon Beyond the Great Wall
An e-commerce giant within China, Alipay, the third-party payment
service provided by the Alibaba Group, has shown unparalleled
growth in the online payment space as Chinese consumers
increasingly gain access to the Internet and online retailers. Since
its launch in 2004, Alipay has seen the number of registered users
soar to almost 900 million in 2013 according to Mercator Advisory
Group estimate.
2014 Mercator Advisory Group

3. Alipay: The E-Commerce Dragon Beyond the Great Wall
To expand beyond the online marketplace, Alipay in 2013 revamped its
mobile wallet solution to facilitate mobile payments at the physical point of
sale. The expansion into mobile payments has been widely successful. In
early 2014, Alipay reported processing nearly $150 billion in mobile
transactions in 2013, dwarfing PayPal’s reported $27 billion in the same
year. Alipay is also seeking to expand geographically. In 2014 and beyond
Alipay will be deployed in a number of countries with large Chinese
populations like Taiwan and Singapore, with a full-scale global rollout
possible down the road.
Mercator Advisory Group’s latest Research Note, Alipay: The ECommerce Dragon Beyond the Great Wall provides context on the
Chinese e-commerce and mobile payment segments by providing
information and statistics on China’s leading third-party payment service
provider Alipay and its closest competitors. This Note also examine the
company’s growth prospects as it seeks to expand beyond its traditional
markets.
2014 Mercator Advisory Group

4. Tristan Hugo-Webb
Associate Director
International Advisory Service
Mercator Advisory Group
“The outlook for Alipay is extremely positive as each year tens of
millions of Chinese citizens access the Internet for the first time and
more often than not also create Alipay accounts and use Alipay to
purchase goods and services online. Apparently not content with
controlling China’s e-commerce market, Alipay has begun investing in
expanding its presence into the mobile channel as mobile payment
opportunities rapidly develop in China. Furthermore, as Chinese
political and economic influence grows around the world, the Alibaba
Group and Alipay will be more active in providing payment services
outside of China’s traditional sphere of influence,” comments Tristan
Hugo-Webb, Associate Director, International Advisory Service at
Mercator Advisory Group and the primary author of the Research
Note.
2014 Mercator Advisory Group

5. Highlights of the full report
• Overview of Alipay’s e-commerce status and standing in
comparison to PayPal and domestic competitors
• An examination of Alipay’s prospects in the mobile
channel as well as its geographic expansion beyond
China.
2014 Mercator Advisory Group

6. Figure 2: Alipay vs. PayPal, 2008–2013
Users (in Millions)
900
850
800
700
700
625
550
600
500
400
300
200
210
143
106
123
2008
2009
2010
2011
Note: Registered Alipay users does not mean active users.
Note: “Active” PayPal users means a customer has conducted 1 transaction in the past 12 months.
2012
Registered Alipay Users (Est.)
Active PayPal Users
120
100
0
81
94
70
Sources: PayPal, Mercator Advisory Group estimates based on collection of sources
2014 Mercator Advisory Group
2013

7. About the Full Report
This report contains 11 pages and 3 exhibits.
Companies mentioned in this report include: Alibaba, Alipay, American
Express, China UnionPay, Tencent, PayPal, and Standard Chartered.
Members of Mercator Advisory Group’s International Advisory Service have
access to these reports as well as the upcoming research for the year
ahead, presentations, analyst access, and other membership benefits.
For more information and media inquiries, please call Mercator Advisory Group's main
line: (781) 419-1700, send e-mail to info@mercatoradvisorygroup.com.
For free industry news, opinions, research, company information and more visit us at
www.PaymentsJournal.com.
Follow us on Twitter @ http://twitter.com/MercatorAdvisor.
2014 Mercator Advisory Group

8. About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory
services firm exclusively focused on the payments and banking industries. We
deliver pragmatic and timely research and advice designed to help our clients
uncover the most lucrative opportunities to maximize revenue growth and
contain costs.
Our clients range from the world's largest payment
issuers, acquirers, processors, merchants and associations to leading
technology providers and investors. Mercator Advisory Group is also the
publisher of the online payments and banking news and information portal
PaymentsJournal.com.
2014 Mercator Advisory Group