WeChat alliance allows shoppers to skip the queue at Walmart’s stores in China

Retail giant Walmart has expanded the roll-out of its “Scan & Go” mobile payment app from the United States to China, the world’s second-biggest economy and largest smartphone market.

Walmart is working with Tencent Holdings to test the app as a Mini Program on WeChat at select stores in Shenzhen, according to a Walmart spokeswoman.

Scan & Go enables shoppers at Walmart, the world’s largest retailer, to scan the bar code on items and bag these goods, including produce, while they shop and pay directly with their smartphones. There is no queuing up at the cash register.

As a Mini Program on Tencent’s multi-purpose WeChat social media-mobile messaging-and-payments service, Scan & Go gains exposure to a vast audience used to paying for purchases by scanning a merchant’s QR code with their smartphones.

WeChat, known as Weixin on the mainland, recorded more than 1 billion users last month, according to Tencent. While QR payment support has had limited popularity in the west, use of the two-dimensional bar codes is an everyday essential for consumers in China’s retail sector.

“We see Mini Program as an important tool to empower merchants and brands in acquiring traffic at a lower cost through WeChat’s large social network,” said Jefferies equity analyst Karen Chan in a report.

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WeChat’s Mini Program platform connects users across a wide spectrum of online and offline services, including retail, e-commerce, utilities and games. At the end of January, WeChat had 580,000 different mini programs, with more than 170 million daily active users.

Walmart’s decision to tie its mobile payment platform with WeChat shows how the large bricks-and-mortar retailers in China are aligning themselves with either Tencent or Alibaba Group Holding, both of which have invested a combined US$10 billion in various retail deals.

The retail partners of Tencent, which runs the world’s biggest video games business and mobile payments platform WeChat Pay, include Carrefour, Walmart, Yonghui Superstores, Vipshop Holdings, Bubugao and JD.com. Tencent is a major shareholder in Beijing-based JD.com, while Walmart has about a 10 per cent stake in the e-commerce firm.

Alibaba, which owns the South China Morning Post, has expanded its offline footprint in the past few years with a series of investments into Chinese retailers, including Suning, Intime Retail and hypermart chain Sun Art Retail Group. Alibaba affiliate Ant Financial Services operates payments platform Alipay.

Separate inquiries made to Tencent and Alipay did not receive an immediate response.

The alliance with internet giant Tencent looks to provides Walmart, which has been operating in China for about 20 years, with a strong ecosystem to further develop its business on the mainland as offline and online retail channels increasingly merge. Walmart operates more than 400 stores across the country, as well as eight distribution facilities and 11 fresh produce distribution centres.

Initial tests of its Scan & Go app with Tencent’s WeChat has apparently been well-received in Shenzhen.

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“I had to stand in a queue to pay for at least 10 minutes at Walmart before,” said Wang Shan, a female programmer who shops at Walmart three times a week. “Now, there’s no more need to line up. I scan the bar codes on the products through WeChat and pick them up.”

With payment made, Wang shows the digital receipt to a Walmart employee upon leaving the supermarket. 

“Walmart has always been focused on making life easier for our busy customers,” the Walmart spokeswoman said. “We are saving customers time at the checkout and engaging them digitally after checkout.”

In the US, the Scan & Go service is being expanded to about 100 stores.

Still, the payments alliance adopted by Walmart in China did not reflect how most Chinese consumers interchangeably use Alipay or WeChat Pay in various online and offline retail environments.

Electronics retailer Suning and department store chain Intime, companies in which Alibaba had made major investments, accept both Alipay and WeChat Pay.

Earlier this week, Walmart said it had dropped Alipay in all its stores in China’s western region, according to a Reuters report.

It quoted a Walmart spokeswoman as saying that the retailer in future “will cooperate with more partners to provide payment solutions with more convenience and benefits”. She said the partnership with WeChat Pay was a “business decision” to improve customer experience.