Alipay, the world’s largest mobile payment platform (operated by Ant Financial Services Group) has announced a three-year plan to further open up its platform to support the digital transformation of 40 million service providers across China.
The goal is to enable these providers to develop and offer a range of lifestyle apps for food delivery, hotel booking, transport, and medical services.
“The service sector in China is still in the nascent stages of digital transformation, and that means it has huge untapped potential,” said Ant Financial Chief Executive Officer Simon Hu in the company’s press release. “Amid the ongoing coronavirus outbreak, we have also seen how digital technology can be used to help service providers become more agile and respond effectively to the fast-changing market environment.”
“Building a one-stop digital lifestyle platform not only creates immense value for our users – it will also play an essential role in accelerating the digital transformation of the service industry and unlocking more growth opportunities,” added Hu.
As part of this initiative, Alipay will allow service providers to tap into in-app traffic, while AI-driven incentive programs will encourage service providers to consistently improve the customer experience.
The press release also explains that users will be able to access personalized recommendations from newly added service sections, meaning service providers will be able to enhance their distribution efficiency.
Under the three-year plan, Alipay will also help 40 million service providers digitalize their operations, increase efficiency and reach more customers by 2030 — with the help of 50,000 Independent Software Vendors (ISVs). Currently, there are over one million on the platform. ISVs are companies that package Alipay’s technologies into solutions to meet the needs of specific industries and use cases, from consumer retail, food-and-beverage, hotels/accommodations, transportation, and medical services.
Impact of coronavirus
In the early days of the COVID-19 outbreak, the company introduced an incentive program that encouraged developers to create mini programs as a way to help users cope with the effects. These include programs that meet lifestyle needs of those working from home, therefore minimizing the need for physical contact with service providers.
In just a week, over 1200 developers responded by creating 181 contactless service mini programs on the Alipay app, for services across China — for example, grocery delivery, legal/medical advice, logistics, and public services. One program providing free medical consultation from AliHealth received an average of 700,000 daily visits.
Beijing-based grocery startup Meicai also launched a delivery mini program for Alipay users amid the coronavirus outbreak, attracting more than 800,000 new users.
Mobile use in China
According to figures from the China Internet Network Information Center, 99.1% of Chinese internet users went online via mobile devices in 2019, compared with just 24% in 2007. Thanks to this increase, the domestic service sector has begun adopting digital technologies.
The National Bureau of Statistics figures show that China’s service industry contributed to 59.4 percent of GDP growth in 2019. While the sector is clearly important to the economy, Chinese service providers still place heavy reliance on traditional brick-and-mortar. Digital technology hasn’t been fully embraced yet as a means to boost efficiency and improve customer experience.
Consumer demand for digitalized services, however, has been expanding rapidly — in 2019, the number of searches for lifestyle services within the Alipay app increased 300% compared with 2018.
As Hu explained, “Since the very beginning, Alipay’s success has always depended on the success of our partners, and that is why we believe the only way to best serve consumers is to open up our platform further, so service providers can better tap into consumer demands.”