Spend too much on the US$25.3 billion Singles’ Day extravaganza? Now you can crowdsource your bill and get your friends to contribute
A total of 1.48 billion transactions were processed by Alipay during the 24 hour period on November 11
Singles worried they may have trouble paying for their “Double Eleven” online shopping festival purchases made on Saturday can rest easy – the e-commerce platforms that hosted the event and some Chinese peer-to-peer (P2P) lenders are offering alternative ways to pay the bill.
Alipay, the electronic payment arm owned by Alibaba Group, quietly introduced a new function on its credit loan product Huabei after the 168.2 billion yuan (US$25.3 billion) shopping gala ended at midnight Saturday, which allows users to send requests to their Alipay friends asking for contributions to help repay their shopping bill.
Huabei works as a virtual credit card within the Alipay app, enabling consumers to pay for online and offline purchases within a credit limit set by Alipay. Since late October, Alipay began raising the credit limit for almost 80 per cent of its users in a bid to encourage more spending during the full day shopping event. Average Huabei consumers could spend 2,200 yuan more this year after the temporary credit limit increase.
A total of 1.48 billion transactions were processed by Alipay during the 24 hour period on November 11, a company announcement said. Huabei is seen as the preferred option for consumers during shopping sprees like Singles’ Day because payments made through other means, like credit cards, can sometimes experience crashes due to online congestion.
Baitiao, JD.com’s credit loan product that allows deferred payment on purchases made on its own e-commerce platform, reportedly saw transactions surge 450 per cent year-on-year during the first hour of this year’s shopping event.
Both Huabei and Baitiao offer deferred interest-free payments for certain periods, just like credit cards. If consumers are unable to pay the bill in full when it is due, both products offer instalment options with additional fees.
Apart from e-commerce platforms which try to stimulate purchases and allow diversified funding and payment options to the consumers, Chinese P2P companies are also stepping up incentives and promotions during the shopping revelry to boost loans, tapping these consumers who either borrow money to shopping, or to pay for the bills.
According to figures released by Chinese P2P lender Jiedaibao, the volume of online money-borrowing activity on the platform started picking up from late October, and peaked just before November 11 when the number of loans surged 130 per cent month on month.
Jiedaibao said loan activity started to increase before the shopping festival because some e-commerce platforms began accepting deposits for certain products starting in early November.
Wangdaizhijia, a Chinese P2P industry data provider, said a total of 280,000 people borrowed money from P2P companies on November 11 last year, up 367 per cent from a year earlier. It has not yet released Singles’ Day figures for this year.