China third party payment market report part 5 – China mobile payment

No. 5 China Mobile payment

1. Brief introduction

Chinese mobile users has reached 641 million in 2008, it is expected to reach 1 billion in 2013.  Mobile users are used to making small amount of payment on their mobile phone. Generally there are 2 popular ways to make payment on mobile: Sending text message and using mobile prepaid charge card.

According to a report “ Chinese third-party payment market analysis” by Analysys , the mobile payment account for 2.7% market share of Chinese third party payment market, compared with 97% market share of online third party payment(such as Alipay, Tenpay) and 0.5% market share of telephone payment.

2. Features

1) Huge user base

Chinese mobile users has reached 641 million in 2008, it is expected to reach 1 billion in 2013.

2) Convenient

Making payment on mobile is even more convenient than make payment online. In China, mobile phone penetration in China has reached 50%, which is 10 times more than the computer phone penetration. Even in rural area, many people use mobile.

3) Portable

Another advantage of mobile payment is portability.

3. Users base

The mobile payment users in China is expected to reach 82.50 million in 2009, the mobile payment market is expected to hit 1.94 billion RMB.[1]

4. Market share

mobile payment account for 2.7% market share of Chinese third party payment market, compared with 97% market share of online third party payment(such as Alipay, Tenpay) and 0.5% market share of telephone payment.

5. Growth rate

The annual growth rate of mobile payment market between 2006 and 2009 is 70.40%.

6. Geographics

Most mobile payment users are urban resident, young and well-educated.

7. Future trends

It is obvious young, educated urban residents embrace the mobile payment more easily than other group of people. But gradually the young mobile phone users in rural area will also take advantage of the convenience of modern technology.

The total market share of mobile payment is close to 10 billion RMB, which is very small compared with the market share of online third party payment(100 billion).

With the development of mobile payment technology, with mobile user familiarizing with mobile payment, the mobile payment market will catch up other payment methods very soon.

China government has introduced a regulation on online virtual currency trade, it says that virtual currency can’t be used to trade for goods and service of other company.  Some consulting firm think it might influence the mobile payment market, namely prepaid charge card payment. [2]


[1] According to the report at http://www.bbtnews.com.cn/it/channel/political71796.shtml

[2] According to the report http://www.enfodesk.com/msite/mainv2/?menu=info_index&sub_menu=info_detail&info_id=16633

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Comments

4 Responses to “China third party payment market report part 5 – China mobile payment”
  1. A huge opportunity indeed. Which companies are active in this field in China right now that you think are important to watch?

  2. Interesting about the virtual currency reference in the article btw. I am not proficient in reading Chinese, so unfortunately I could not read the article you refer to. Korea seems to have taken a different direction with virtual currency trade:

    http://www.virtualgoodsnews.com/2010/01/korea.html

  3. Steven Chow says:

    Hi Lars Tong Strömberg,

    For online third party payment platform, 99bill and soopay are definitely leading the game in mobile payment, if you read another article on china-online-marketing.com http://www.china-online-marketing.com/blog/online-payment/china-online-and-offline-payment-strategy/

    Soopay is founded by the biggest mobile company in China, China mobile. 99bill has tremendous experience in mobile payment, they accept mobile precharge card payment.

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  1. […] The China Online Marketing Blog recently did an interesting five part series of posts discussing the various methods of making online payments in China. Even three years ago, these payment were barely being used at all and though their usage is nowhere near the levels in places like Korea or the United States, they are increasing at an incredible pace. Part 1 on Alipay is here, part 2 on Tenpay is here, Part 3 on online bank transfers is here, Part 4 on credit card payments is here, and part 5 on China Mobile payments is here. […]