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China Leads In Mobile Payments

Apr. 12, 2018 9:07 AM ETPYPL, BIDU, BABA, JD, TCTZF, TCEHY12 Comments
Kevin T. Carter profile picture
Kevin T. Carter


  • China's mobile payment market dwarfs that of the U.S.
  • Consumer comfortable with online shopping and mobile payments driving growth.
  • Mobile payment market dominated by Alibaba and Tencent.

In 2016, China’s mobile payments hit $5.5 trillion, roughly 50 times the size of America’s $112 billion market, according to consulting firm iResearch. I have one word to describe this stat - WOW! Chinese consumers are adopting cashless and e-commerce methods at a rate significantly faster than the rest of the world. From a population standpoint, China's population is 6 times the size of the U.S.

One behavioral statistic or fundamental reason for some of the growth is that 31% of Chinese consumers will click on an advertisement that is relevant to them vs. 16% globally, almost 2 to 1 more likely to respond to targeted ads according to a PWC report on ecommerce in China.

Another fundamental factor is that China has a younger population and younger consumers are more trusting of cashless and e-commerce transactions.

China’s ecommerce market is set for continued growth thanks to the proliferation of mobile buying and the dominance of marketplaces such as Alibaba (BABA), JD.com (JD) and Tmall. Growth in online purchasing is being spurred along by a growing comfort with mobile shopping, greater spending by consumers in smaller cities, and the expansion in the variety of goods being purchased. The popularity of shopping on a mobile phone is expected to continue.

China, the largest E-commerce market in the world, is now setting the benchmark for present and future global retailing. This is driven by its mobile-first consumer behavior, innovative social commerce model, and a trusted digital payments infrastructure. E-commerce is a clear growth story, says PWC’s Michael Cheng in a report eCommerce in China – the future is already here. He also breaks out the “9 trends shaping retail and consumer products sector in China”.

Online payments in China is dominated two main players, Alipay owned by Alibaba and WeChat Payment, owned by Tencent (

This article was written by

Kevin T. Carter profile picture
I am an Emerging Markets focused investor who is half active "value" investor and half indexing and ETF entrepreneur. My current focus is FMQQ - The Next Frontier Internet Ecommerce Index and EMQQ - The Emerging Markets Internet & Ecommerce Index, of which I am the founder. The FMQQ and EMQQ Indexes have been licensed to Exchange Traded Concepts as the basis for an ETF (NYSE: EMQQ, FMQQ). I have also worked with Princeton Economist Dr. Burton G. Malkiel to develop index-based strategies since 1999, including three China-focused ETFs with INVESCO (NYSE Tickers TAO, HAO & CQQQ). I have been a featured speaker for organizations including Columbia Business School, Bloomberg, Morningstar, and the China Hedge Fund Association. I pray towards Omaha and manage a highly concentrated investment partnership that seeks excellent businesses at reasonable prices. I received a BA in Economics from the University of Arizona and began my career with the investment management division of Robertson Stephens & Company in San Francisco in 1992. I manage an Emerging Markets Hedge Fund that is sometimes long constituent's of EMQQ, FMQQ, and myself and my family are long FMQQ and EMQQ.

Analyst’s Disclosure: I am/we are long BABA, TCEHY, BIDU, JD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (12)

Student of_Value Investing profile picture
Paypal will not work in China.. especially partnering with Baidu
ApplePay is also very much dead in China, but rumor is Xiami, Huawei and few others are teaming up developing a counter measure to WeChat and payment platform.
Student of_Value Investing profile picture
Xiaomi and Huawei are legit phone makers but don't think they can challenge either Wechat or Alipay
waste of resources
duh, this isn't news. Alipay and Wechat pay are both huge in China and Internationally.
"In 2016, China’s mobile payments hit $5.5 trillion", I don't believe this is an accurate number for online payment for 2016, its more like $550B.
Ben Gee profile picture
China's total consumption for 2017 was close to $5.5 trillion. Chinese mobile consumption for 2016 was 5.5 trillion Yuan or about $870 billion US.
If Chinese mobile payment grew by 30% in 2017, it would be about $1.2 Trillion
Student of_Value Investing profile picture
The number is correct, that's how big the market is
Ben Gee profile picture
Chinese 2016 GDP was about $ 11,4T, consumption was about 45% of GDP or about $5.1 T, surely, e commerce can not be greater than total consumption.
5.5 T is correct, in Yuan, not in $.
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