China’s leading e-payment provider Alipay and popular microblogging platform Weibo have launched an online payment product designed to allow users to easily buy products discovered through their friends both online and offline.
Currently, users on Sina Corp’s Twitter-like Weibo platform must log onto their Alipay accounts in order to buy goods and services. But with Weibo Payment, launched on Tuesday, the integration with Alibaba Group’s affiliate Alipay goes much deeper, enabling users to connect their Alipay accounts with their Weibo accounts and buy items without having to log in. After making a purchase, users can share their views on the product with their Weibo fans.
Last April, China’s largest e-commerce company, Alibaba Group, paid $586 million for an 18 percent stake in Weibo, which has more than 500 million registered users and over 60 million daily active users. In August, Alibaba Group rolled out a new product that made it easier for Weibo users to shop via Alibaba’s Taobao Marketplace.
Sina Corp’s Wang Gaofei, general manager of Weibo, said the popularity of the messaging service/social network, coupled with that of Alipay, will be a potent combination for social e-commerce.
According to a 2011 Boston Consulting Group report, Chinese consumers are possibly the most active in the world when it comes to social e-commerce. Because of the prevalence of counterfeit goods and a mistrust of product reviews in the conventional media—good notices can be bought and sold in the PRC—Chinese shoppers rely heavily on feedback from their peers when making buying decisions. A BCG survey found that more than 40 percent of Chinese online shoppers regularly read and post reviews of their online purchases, double the rate of online shoppers in the U.S.
This ‘word-of-mouth’ effect makes social networks like Weibo and fast-growing rival WeChat, owned by Tencent Holdings, increasingly powerful marketing and e-commerce tools. According to Sina Corp, Weibo has over 400,000 businesses selling goods on the platform.
Alipay and Weibo are also integrating their QR code systems to allow for better online-to-offline shopping experiences. In the future, Weibo users will be able to scan QR codes displayed on their smartphones to buy products offline—for example at vending machines or store registers.
Alipay’s mobile application, Alipay Wallet, already allows users to scan QR codes and use sound-wave technology to buy goods and services all over China. Weibo Payment’s mobile application will also eventually have some of those functions.
According to the China E-commerce Research Centre, about 6.3 percent of all online retail transactions in 2012 were concluded over social networks, a number that was expected rise to 7.4 percent in 2013.