Why Add Alipay to Shopify?
While less popular in North America, Alipay is taking off in popularity in other countries. In the fall of 2019, Alipay had more than one billion users. That puts it far ahead of PayPal, which has approximately 325 million users on its payment platform. Shopify’s move to include AliPay tells us that it’s determined to increase its appeal to Chinese customers.
Increasing Shopify Access to Major Shopping Events
Asia has its equivalents to North America’s Black Friday, Amazon Prime Day, and similar promotions. For example, Alibaba offers “single day” (i.e., 11.11 Global Festival) annually in November. The company earned $74 billion in gross sales in 2020, nearly double its 2019 sales of $38 billion in 2019. Singles's day revenue has exceeded Amazon Prime Days sales by billions of dollars since at least 2016.
The event is not limited to China either. US-based companies earned an estimated $5.4 billion in sales from the event, according to the Ottawa Business Journal. Overall, an estimated 31,000 non-Chinese brands participate in the annual retail event.
By offering Alipay payment, Shopify is hoping to appeal to these customers. Also, other Chinese holidays such as Lunar New Year present a significant retail opportunity as well. In 2019, retail sales linked to the Chinese New Year generated approximately $147 billion US in revenue.
Shopify Offers Over 10 Payment Methods in China
The addition of Alipay aligns with Shopify’s commitment to the Chinese market. Shopify offers the following payment providers in the Chinese market: China Payments, 2Checkout, Asiabill, 2Checkout, Cybersource, Citcon, PayDollar, PayEase, PayPal Express Checkout, and PingPongPay. In the United States, Shopify offers even more payment options such as Amazon Pay, Affirm, Bread, BitPay, and WorldPay.
The variety of payment platforms matters for ecommerce merchants because it fosters competition for pricing and customer service. Historically, a small set of credit card companies - including American Express, Mastercard, and Visa - dominate retail payment systems. However, some consumers may not have access to conventional credit cards. By expanding payment options further, Shopify merchants will be able to compete against traditional offline merchants.
Shopify’s Expanding Presence In China
Shopify's expansion in the Chinese market goes beyond payment platforms. According to the analytics website, BuiltWith.com, more than 1,100 websites are using Shopify in China. Globally, BuiltWith.com estimates that over two million websites are using Shopify — half of which are based in the United States.
The growing number of China-based merchants using Shopify has not gone unnoticed. Shopify is building up its Chinese operation. Shopify, which is based in Canada, hired a business development executive in 2019. Last year, Shopify had five employees in Shenzhen and had continued to grow the team. To make its platform more attractive, Shopify launched its service in traditional and simplified Chinese in 2019.
In 2020, Shopify has steadily attracted more and more Chinese merchants to the platform. According to Storeleads.app, 2,210 new Chinese websites were using Shopify in 2020. In 2017, Shopify only attracted about 92 new Shopify stores in China.
What Do Chinese Shopify Stores Sell?
A sampling of the top four Shopify stores in China reveals the variety of today’s ecommerce market.
- www.buykud.com. Buykud mainly offers clothing, accessories, and plus-sized apparel for women.
- www.shopbackdrop.com. ShopBackUp is a home decoration store selling rubber floor mats, floor coverings, and backdrop images.
- www.ugreen.com. uGreen offers technology products such as USB cables, iPhone accessories, phone holders and protectors, and USB devices.
- www.meepoboard.com. Meepo specializes in products for electric skateboard enthusiasts. Accessories include protective equipment, wheels, grip tape, remotes, t-shirts, and lights. Based in Shenzen, the company has sold over thirty thousand electric skateboards.
Shopify’s Ecommerce Software Competition
Competitive pressures may partially drive Shopify’s push to expand to new markets. While Shopify is ahead of BigCommerce in revenue — find out more in BigCommerce vs. Shopify: Who's Winning In 2020? — it still faces competition from other ecommerce software companies. For instance, WooCommerceCheckOut has a higher market share (2.98% vs. 2.01% for Shopify) in the world's top one million websites, according to BuiltWith data.
About the Author
Bruce Harpham is an author and marketing consultant based in Canada. His first book "Project Managers At Work" shared real-world success lessons from NASA, Google, and other organizations. His articles have been published in CIO.com, InfoWorld, Canadian Business, and other organizations. Visit BruceHarpham.com for articles, interviews with tech leaders, and updates on future books.