Tapping Into 120 Million Traveling Wallets

You’re a retailer, beset by the twin problems of brick-and-mortar and fickle U.S. consumer spending.

Picture 625 million wallets, ready to open for the right retail experience. Of that, picture 120 million wallets right in your own backyard, flush with cash and credit. No dream, this: Alipay is expanding its efforts and footprint in North America to capture discretionary spending as Chinese tourists flock to the region for culture and entertainment … and spend on everything from food to handbags.

In an interview with Karen Webster, Souheil Badran, Alipay North America president, said that the expanded efforts in North America come amid timing that is opportune, as retailers are challenged to “open up their doors” with so much competition online and offline. Many of these retailers, he said, did not perform as well as might have been expected on Black Friday or even Cyber Monday. Against that backdrop, said Badran, Alipay’s user base encompasses 450 million users in Asia, and the firm’s platform enables another 175 million individuals in India. Badran said: “At some point, we’ll be able to bring those to the U.S. as well.”

“If I’m a retailer, I am looking for [a customer] who is wanting to spend more. If I’m a brand, I’m trying to figure out: How can I expose my brand” across marquee names, such as Nordstrom, Macy’s or even Louis Vuitton, “that they know who I am obviously, and they have the ability to spend?”

Propensity to spend comes as 120 million Chinese consumers will pack their bags and journey abroad, spurred in part by the Chinese New Year. But some changes are afoot, Badran said, in just how these individuals will, and do, travel. In the past, he said, the typical mode of vacation was to book a packaged tour, and “now, all they are booking really are their flights and hotels. Everything else, they are off on their own.” Many of those travelers are beginning to explore what Badran termed “Middle America,” with stops at national parks. “It’s not just New York, Florida, San Francisco and Los Angeles,” although they remain top of the vacation spot hit list, for sure.

Regardless of the places they spend money and the retailers they visit — including Walmart and Costco — said Badran, it is important that the Chinese experience abroad is one that is as clean as can be, one where the user is compelled to pull out a credit card and swipe that card. And, added Badran: “Chinese consumers are very quick to pull out their app and then scan a code.”

To help marshal that experience, Alipay offers a “discovery feature” that alerts users to the merchants that surround them in general and pinpoints the merchants that specifically accept Alipay. “We’re driving a lot of marketing within the app itself,” he told Webster, “in a way that Chinese consumers can understand it.” In reference to that usability, Badran noted that Chinese consumers tend to be swayed by pictures of what is on offer. So, rather than just displaying, say, a promotion from a restaurant for discounts or rewards, pictures of menu items are presented, via machine translation, to help inform choices.

In addition, Ant Financial is looking for ways to extend credit to these Chinese consumers as they travel abroad with ancillary services on offer. Badran noted that his firm runs one of the largest money market funds in the world and is among the largest insurance exchanges in China. Illustrating a continuum of services, a consumer buying a Louis Vuitton purse that costs $3,000, with $2,500 in their account, will be extended credit without additional information having to be provided, as “we know your credit score and we know you are good for [that credit].”

“We’re not just another wallet,” said Badran.

And at the point of sale, continued Badran, Alipay is linking with several firms to enable QR code scanning, including Verifone, First Data and Ingenico. Where initially the mindset had been that “everything has to be around NFC, that’s kind of shifting” to embrace other payment conduits. So, smaller retailers with, say, one POS (think of a cupcake shop, said Badran) can accept payments via Alipay.

And beyond the vagaries of politics (and what may transpire between the U.S. and China during Trumpian times), Badran noted that his firm is focusing on showing value to both the consumer and the merchant. “We’ll keep the politics out of it and focus on what consumers want.”