According to a report by the Chinese business magazine “China Entrepreneur,” Alipay has been strategically recruiting talent from platforms such as Douyin and Xiaohongshu since last year. The focus has been on roles in operations and advertising to bolster its content strategy. Earlier this year, Alipay began internal testing of a social feature called “Interest Communities.” This feature, as seen in images provided by users involved in the testing, includes various interest groups like coffee, wine, camping, baseball, hiking, fishing, cycling, and more for user discussions. Users can join local groups for offline activities by simply clicking, signaling Alipay’s pivot towards social networking.
With a user base of 1 billion, 800 million monthly active users, and 80 million merchants, Alipay boasts a vast amount of traffic akin to a top-tier application. However, these resources have not been fully utilized, presenting a significant missed opportunity. Realizing this, Alipay has been focusing on nurturing its content ecosystem over the past year or two to keep users engaged. This has involved upgrading “Life Accounts,” introducing image-text short videos, and venturing into the realm of live streaming for sales. While these efforts have primarily been supply-side focused, the key to unlocking the full business value loop lies in attracting more user interaction and consumption after expanding into social circles.
Alipay’s strategy of gradually delving into content creation, merchant-driven sales, and consumer social networking is clear. Yet, the question remains whether these initiatives have come too late.
“Better late than never,” a spokesperson from Alipay told “China Entrepreneur.” “Alipay has many opportunities, but there was less urgency in the past, with a reliance on payments alone being deemed sufficient. However, even the dominance in payments is now under threat from traffic platforms.”
In recent years, Alipay’s market share has been gradually eroded by WeChat, with longer-term concerns revolving around Douyin. Internally at Ant Group, there is a belief that Douyin will eventually leverage its traffic to compete directly with Alipay. If this trend persists, Alipay, resting on its laurels, will inevitably fall behind its competitors.
From a broader strategic perspective within Ant Group, if the financial business is spun off for a separate listing in the future, Ant Group stands to lose a significant portion of its revenue and profits. Therefore, Alipay must undertake the responsibility of exploring revenue channels beyond payments—focusing on commercializing traffic. The aim is not to directly compete with content platforms like Douyin and Kuaishou but to expand market share, reduce the proportion of financial business revenue, and present a more diversified business ecosystem with varied revenue channels to be deemed successful.
Over the past six months, Alipay’s commercialization efforts, centered around live streaming sales and monetizing public domain traffic, have been accelerating. On August 17th last year, Alipay officially launched the commercial promotion platform “Denghuo” and updated two major platform support policies to increase traffic incentives for small and medium-sized businesses. This marks the comprehensive phase of Alipay’s traffic commercialization. In terms of content, after over a year of cultivation, Alipay fully opened the UGC entrance in early November last year, allowing users to publish short video content on the third tab of the app’s homepage. This move aims to enrich the content ecosystem through user-generated content, enhancing user engagement and usage time. At the end of November last year, Alipay announced the streamlining of the merchant onboarding process, lowering entry barriers, and officially launching the product sourcing system, open to merchants. Before the Spring Festival this year, the first merchant life account on Alipay had attracted over tens of millions of views.
As an open life platform, Alipay’s functionalities are becoming increasingly complex, resembling platforms like Douyin or WeChat. However, Alipay’s objective is not to replicate these platforms but to offer a unique solution for merchants to manage their businesses effectively. Alipay aims to provide tools like live streaming, image-text content, and community building to empower merchants and enhance user engagement.
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