M-commerce changes the face of China's business landscape

In both cities and rural areas 358 million Chinese people made a payment from a mobile device last year.

Mobile commerce changing behavioural habits

Mobile commerce changing behavioural habitsĀ Image: Michael Davis-Burchat

As many Chinese leapfrogged the personal computer and went straight to smartphone, so too have their payment habits. Some 16.4 trillion yuan ($2.5tn) was transferred via mobile devices in China last year, according to research firm Analysys International.

This mobile-driven consumption reflects global trends, with the UK seeing mobile ad-spend overtake TV advertising for the first time.

A decade ago only seven million people in China held a credit card, with even large transactions such as purchasing a house or car historically being paid for in cash. Now a quarter of the population use mobile devices to pay for almost every aspect of their shopping needs.

More than 200 mobile payment companies are fighting for market share, although Alipay dominates the market with 73% of the total transaction volume, followed by WeChat Payment. Every aspect of life, from paying for utilities, wealth management, even buying food from street vendors, can now be managed using mobile payments whose 0.6% transaction fee average is often less than credit card charges.

Companies like Alibaba are also looking for growth opportunities outside China's larger connurbations. The Internet giant has teamed up with the China Communist Youth League in Guizhou to help train one million teenagers to take e-commerce to rural areas.

Alibaba has set aside 1 billion yuan ($154m) to train and finance entrepreneurial college graduates keen to set up a digital business in their hometowns. Western e-commerce giant Amazon is also targeting rural China and hopes to bring its "Prime Air" drone delivery service to hard-to-reach areas.