China's Third-Party Online Payment Market Confronts Increasing Fierce Competition

Source:iResearch March 23,20163:13 PM
In 2015, the GMV of China's third-party online payment totaled 11.8 trillion Yuan, rising 46.9% compared with the previous year.

Many traditional industries like online flight travel booking and online gaming keep steady growth in Q4 2015, while the growth of fund transaction GMV was higher. In addition, the e-commerce came into peak season in Q4, and GMV of online shopping and B2B e-commerce enjoyed rapid quarter-on-quarter growth. The above factors contributed to increasing of third-party online payment in Q4 2015. 
The rising share of online shopping and the expanding share of fund transaction 

By GMV, online shopping accounted for 23.2% in China’s third-party online payment market in Q4 2015, fund transaction19.8%, flight travel 8.7%, telecom recharging 3.5%, B2B e-commerce 5.3% and online gaming 2.0%.

It could be seen that the share of online shopping was decreasing from market structure of third-party online payment from Q4 2014 to Q4 2015, which was attributed to a large number of online shoppers shifted from PC to mobile with the rapid development of mobile Internet and the shift led to the decelerating growth of online shopping payment via PC. Besides, the share of fund transaction fluctuated but generally showed an increasing momentum resulted from the folowing factors. Firstly, the purchase amount of balance-type fund increased significantly. Meanwhile, internet users’ online financing habit was gradually established. PC served as the main purchase channel for large-sum finance products, and fund transaction GMV kept rising.
The competition among payment companies was increasingly fierce.

The fast development of mobile Internet attracted many payment companies. In 2015, Alipay users from mobile has took up 65% of total Alipay users. Meanwhile, Alipay users’ loyalty from PC is decreasing and Alipays’ online payment GMV growth decelerate. Therefore, Alipay’s share in online payment market shrank to 47.5% in 2015. 

Tenpay accounted for 20% in China’a online payment market in 2015 because it built open cooperating platforms, increased payment scenarios based on WeChat and QQ, integrated mobile payment with online payment to provide comprehensive financing services for clients.

JD has seven payment-based businesses. In 2015, it ramped up efforts to develop Internet financing business with its advantages in e-commerce and grabbed a market share of 2.0%. Moreover, iResearch forecasted it had huge potential in online payment market.

Meanwhile, although the authority enhanced supervision and regulation of P2P industry, its GMV still experienced obvious growth in 2015. ChinaPnR, Yeepay and Baofoo all had satisfying growth and Suning, one of the e-commerce giants which made great efforts to develop financing business, also had remarkable achievement based on Yifubao, Suning’s online payment service, took a market share of 1.2%.
What’s more, Yeepay, 99Bill, China Payment & Clearing Network and other payment companies put much emphasis in the development of online flight travel booking services, B2B e-commerce, supply chain and Internet financing and offer client companies high-quality third-party payment solutions, which helped those client companies to improve their payment efficiency and enhanced their fund management. Furthermore, this also conduced to improve the service level of payment companies themselves, enhanced their competitiveness and expanded their influence in this field.

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