McDonald’s, Starbucks favoured by China’s Alipay users overseas during Labour Day holiday

When it comes to dining overseas, many Chinese holidaymakers choose to spend their money on meals at McDonald's, Hong Kong-style eateries known as cha chaan teng and coffee at Starbucks, according to the operator of mobile payments service Alipay.

Data published on Thursday by Ant Financial Services Group, which runs Alipay, found that popular US fast-food chains, Hong Kong-style cafes and coffee shops had processed the most Alipay transactions among food establishments visited by Chinese tourists during the recent Labour Day holiday, which stretched from Sunday to Tuesday this week.

The annual Labour Day holiday represents a busy travel period for mainland Chinese, just like the country’s week-long break for National Day on October 1. Government estimates had more than 1 million mainland Chinese travelling overseas on April 30. 

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Data from Ant Financial, an affiliate of e-commerce giant Alibaba Group Holding, showed that Hong Kong, Thailand, South Korea, Japan and Macau were the top five destinations for Chinese tourists, measured in terms of Alipay transaction volume, during the three-day holiday period.

Alipay had processed five times as many in-store transactions overseas compared to last year, as average spending per user jumped nearly 60 per cent to 1,508 yuan (US$236.92), according to Ant Financial. That was up from the 946 yuan average recorded in the same period last year.

No statistics on WeChat Pay transactions and usage during the Labour Day holiday will be released, according to a spokesman for Tencent Holdings.

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During that period, WeChat Pay launched a series of promotions with a number of brands and retailers, such as Starbucks and Watsons in Macau, as well as Aeon department stores in Japan, to offer attractive discounts when using the Tencent-backed service. 

Alipay also launched similar promotions to encourage tourists to pay with its app.

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This year’s Labour Day holiday further showed how mainland Chinese tourists have helped drive the expansion of the country’s ubiquitous mobile payment services to the countries they visit.

As mobile payment apps, Alipay and WeChat Pay have enabled consumers in China to go straight from cash to smartphone, leapfrogging the use of credit cards and cheques.

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Both Alipay and WeChat Pay have popularised paying for purchases made at the point of sale by tapping, swiping or checking in with a smartphone, using the near-field communications feature built in the handset or the machine-readable optical label known as QR code.

Mobile payments in China are used for a wide range of transactions, from paying for smartphone game upgrades and ordering takeaway food online to purchasing movie tickets and sending electronic hongbao – red packets with cash as gifts.

A recent white paper from data research firm Nielsen and Alipay found that more than 90 per cent of Chinese tourists sampled in their study said they would use mobile payment overseas if given the opportunity. Many companies in countries across the globe have acquiesced in light of the amount of business these travellers bring.

In Southeast Asia, North America and Europe, tens of thousands of merchants already accept Alipay and WeChat Pay as payment methods from Chinese tourists.

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Last year, mainland Chinese travellers made more than 130 million outbound trips and spent an estimated US$115 billion on those journeys, according to a report by the China Tourism Academy and online travel services provider Ctrip.

During the recent Labour Day holiday, Chinese travellers to Europe, which include popular destinations like Spain, France and Italy, were among the biggest spenders, Ant Financial data showed. 

In Spain alone, Chinese holidaymakers spent nearly 8,000 yuan on average with Alipay.

Six out of 10 countries with the highest Alipay spending per user were in Europe, a continent popular among affluent Chinese since luxury brands there are often priced lower than on the mainland after tax refunds.

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About two-thirds of those who used Alipay overseas during the Labour Day holiday were female, according to Ant Financial. Those born in the 1980s and 1990s accounted for 85 per cent of all those who used Alipay overseas during that three-day period.

China’s mobile payments boom, however, has also made apparent a growing class of digital have-nots, which include older consumers who are less tech-savvy and not familiar with digital trends.

China’s village people fast to adopt mobile payments

WeChat, whose active monthly users hit 1 billion during the Lunar New Year in February, had 50 million users aged between 55 and 70 years as of September last year, according to the 2017 WeChat report released in November.

On Alibaba’s Taobao Marketplace and Tmall retail platforms, about 30 million users are aged over 50.

Alibaba, the parent company of the South China Morning Post, has started recruiting people older than 60 years and paying them up to 400,000 yuan a year to help the company better understand how elderly consumers shop online and devise ways to improve that experience.