The world’s two largest smartphone makers Samsung Electronics and Apple are expected to vie for the leadership in China’s mobile payment service market.
As smartphone sales are slowing down in Asia’s largest market, both tech giants find it necessary to unveil new services to retain their market shares in the nation, according to market watchers.
In a bid to better appeal to Chinese consumers, chiefs of both companies rolled up their sleeves to seek a partnership with local companies.
Apple’s chief Tim Cook flew to China this week to meet with heads of China’s biggest e-commerce company Alibaba Group to discuss its mobile payment service Apple Pay’s inroads into the market.
He told China’s local media outlets, “We very much want to get Apple Pay in China,” and added, "I'm very bullish on Apple Pay in China.”
Apple Pay has so far failed to jump into the market due to the Chinese government’s strict regulations and high charges. However, the latest partnership with Alibaba seems to be the green light for the launch of its mobile payment service in China.
Analysts say that Apple is likely to link it with Alibaba’s mobile payment service Alipay, which has around 800 million subscribers and accounts for 50 percent market share in China.
If Apple Pay teams up with Alipay, iPhone users in China may use the American firm’s service in Alipay’s partner stores.
“Due to concerns about illegal copying, the penetration rate of credit cards in China accounts for only 10 percent of the total population in China. The low penetration rate can be a good sign for mobile payment services like Apple Pay,” said Cho Sung-whan, a researcher at LG Economic Research Institute.
Apple’s chief rival Samsung Electronics is also planning to unveil its Samsung Pay in China’s market. For this, Lee Jae-yong, the vice chairman of Samsung Electronics, flew to China to meet with Ge Hua-yong, chairman of China’s largest bank card organization, to discuss the partnership on Samsung’s mobile payment service Samsung Pay.
The reason behind both firms are ramping up their efforts on the new service in China is that they hope the service can attract more users in the nation where smartphone sales are cooling down.
The research firm IDC said smartphone sales in the first quarter in China saw a 4 percent drop from the same period of last year as 90 percent of Chinese already possess the devices.
“Apple’s iPhones outsold Galaxy in the first quarter of this year in China. Samsung Pay should get ready faster to take the leadership in the mobile payment market,” a local analyst said.
By Chun Go-eun
