Luxury goods and the World Cup draw Chinese tourists as Russia and Europe top Alipay spending chart

Millions of Chinese tourists travel the world during the summer months and their propensity to shop and spend make them an attractive target. This year Russia and European destinations were some of the hotspots for online and mobile payments, according to a new report.

Russia saw over 50 times growth in Alipay transactions this summer – compared with a year ago – helped by the World Cup, according to a report by Alibaba Group Holding affiliate Ant Financial Services, which operates the Alipay payments platform. Luxembourg (39 times growth) and Switzerland (18 times growth) also featured high on the list.

Hong Kong, a popular shopping destination for Chinese tourists, took the top spot for the biggest Alipay transaction volume for the months of July and August, ousting Thailand, which topped the charts last year. Thailand came second in 2018, followed by South Korea.

Average spending per Alipay user abroad jumped 43 per cent from 2,073 yuan to 2,955 yuan (US$433), with China’s biggest spenders splurging in France, a popular destination for luxury goods shopping. In France, the average Chinese tourist spent 11,386 yuan with Alipay, almost four times than the average.

Chinese tourists are the biggest spenders globally, with outbound travellers spending US$258 billion in 2017, accounting for one-fifth of the world's total spending on tourism, according to the United Nations World Tourism Organisation World Tourism Barometer.

Chinese mobile payments providers like Alipay and rival Tencent Holdings' WeChat Pay have been stepping up their expansion plans across the globe, working with tens of thousands of overseas merchants to accept Alipay and WeChat Pay as a payment method as hundreds of millions of Chinese tourists travel overseas every year.

These online payments platforms allow Chinese tourists to pay for their overseas shopping directly within the Alipay and WeChat apps, allowing them to settle the payment in yuan instead of having to use credit cards, which typically incur foreign transaction fees.

For Alipay and WeChat Pay, encouraging Alipay and WeChat Pay as payment options outside of China, especially in destinations popular with Chinese tourists, can help drive transaction volumes since users are more likely to use payment methods familiar to them for convenience. Additionally, the ticket size of each transaction is also likely to be larger when users are travelling abroad.

Alibaba is the parent company of the South China Morning Post.