Two of China’s most successful entrepreneurs, Li Ka-shing and Jack Ma Yun have come together to launch a new venture that will expand the digital payments industry in Hong Kong.
China is a global leader in mobile payments. In 2016, Chinese mobile payments were nearly 50 times greater than those in the US. This is largely because the country’s ecommerce has grown exponentially. Alibaba is one of the leading giants in the nation’s ecommerce industry and has committed itself to massive expansion.
In 2016, it was reported that Alibaba’s Alipay (mobile payment tool) and Tencent’s WeChat Pay processed $2.9 trillion in Chinese digital payments. A UN study revealed that this was a 20 fold increase from the past four years.
Eric Jing, CEO of Ant Financial Services Group, which operates Alipay said, “There is a quiet revolution underway and we know, firsthand, that our services are making a real difference to hundreds of millions of consumers. But, as this groundbreaking UN report highlights, this revolution is only just beginning. We see tremendous potential to bring many more people into the financial system, in China and markets around the world.”
Li Ka-shing is the richest man in China. His net worth is reportedly $33.8 billion and is the Chairman of the board for CK Hutchison Holdings. Jack Ma Yun is a Chinese business magnate who is the founder and Executive Chairman of Alibaba Group. The two men are reportedly working together to launch a new venture that aims to expand the reach of digital payment services specifically in Hong Kong.
This will be a 50-50 joint venture that will integrate online and offline Hong Kong dollar payments under the AlipayHK brand. Due to the new scheme, AlipayHK service will be available in all the stores coming under CK Hutchinson’s vast network. CK Hutchinson has a number of businesses across various industries including telecom and infrastructure. It also has a stake in retail market, energy and ports. In retail alone, CK Hutchinson has 600 stores across Hong Kong.
Canning Fok Kin-ning, co-managing director of CK Hutchison said, “By leveraging CK Hutchison’s extensive market presence and combining its commercial experience with Ant Financial’s technology expertise, we will bring great benefits not only to our telecoms, retail, and other customers of the group, but also to all businesses in Hong Kong.”
AlipayHK’s mobile wallet currently competes against Apple Pay, Samsung Pay, Android Pay and WeChat Wallet service. It was introduced in the beginning of 2017 and is already accepted in about 4,000 retail outlets in the city.
Our assessment is that China continues to be on the forefront of the digital payments industry and is investing significantly in the expansion of the sector. As governments across the world navigate towards a cashless society, China will have an advantage as it has begun much earlier than nations like Japan. The joint venture between CK Hutchinson and AliPayHK will result in the sector growing in Hong Kong.