Apple Pay faces tough fight for slice of China's mobile pie
APPLE yesterday launched its mobile payments service Apple Pay in China, pitting the United States technology giant against strong domestic players in an already crowded field.
The world's second-largest economy is a crucial market for the California-based firm.
Apple Pay is available in only a handful of other countries, including the US, Britain, Canada and Australia.
But unlike most other countries, mobile payment systems are already well-established in China and Apple does not have a first-mover advantage.
China's mobile transactions were valued at 9.31 trillion yuan (S$2 trillion) last year, up an annual 57 per cent, one industry estimate showed.
The most dominant mobile and online payment providers are e-commerce giant Alibaba, with a nearly three-quarters market share, and Tencent - operator of the popular messaging app WeChat - at 17.4 per cent, according to Beijing-based BigData Research.
The Apple brand commands a strong following in China, especially among the nouveau riche and emerging middle class.
Ray Zhao, an Internet industry analyst at Guotai Junan Securities, said: "There is still a chance for Apple Pay to grab some market share. Some loyal Apple users may prefer using it instead of other payment tools."
Analysts said Apple's iOS system is both a plus and a minus in China. It potentially provides better security for transactions.
But most people have homegrown phones with the Android system.