With WeChat Pay and Alipay now accessible to foreigners, how will this benefit brands?

The strategy may have proved successful with both Alibaba and JD.com reporting record-breaking sales. While the companies did not release figures of the amount or percentage spent by shoppers outside China, over 200,000 brands participated and 100 million new users joined the festival this year.

Originally a quirky celebration for singles in China, 11.11 has evolved into a global phenomenon and now the world’s biggest shopping event that is also shaping the future of retail. Beyond the sales, Singles' Day reflects the growing popularity of cross-border commerce globally. This trend can only continue to grow if shoppers – both in China and globally – are able to easily tap into and transact in each ecosystem.

According to eMarketer, the Asia Pacific region is dominating the global uptake of e-wallets and mobile point-of-sale payments, with China having almost half (45.2%) of its population already tapping into mobile payments. As a whole, the region is expected to continue moving towards a cashless society. With transactions made frictionless with the help of payments solution providers across the globe, international brands can reel in the limitless opportunities from seamless cross-border commerce.

Cross-border commerce now a global phenomenon

According to Statista, cross-border purchases will account for more than 22% of global e-commerce. The Chinese e-commerce market is a global leader, with an estimated gross merchandise volume (GMV) of EUR 4.1 trillion in 2019. Cross-border shopping is the main contributor to China's e-commerce boom. By 2021, the GMV of China's import e-commerce market is expected to hit EUR 44.7 billion.

The Chinese market presents a tremendous opportunity for international brands and players to engage with Chinese shoppers. With Chinese e-commerce platforms becoming more developed and user-friendly with the incorporation of new digital payments for consumers’ ease and convenience, international retailers are seeing a wealth of opportunities to grow their global market share with both new and existing customers.

The role that digital payments play in shaping this cross-border commerce trend cannot be ignored. By making the payment process seamless, offering locally preferred payment methods, and tailoring the checkout experience to local preferences and customers, companies can win the trust of global customers and increase cart conversions. Harnessed effectively, payment transaction data can also provide insights, which can help companies improve and expand offerings such as loyalty programs, and discounts that can boost sales.

With an industry-wide effort to enter China, companies are working with global payment providers that can help them gain access to Chinese consumers. For example, Swiss Post's "Your Gateway to China" service is leveraging technology to incorporate Chinese payment methods into their systems, so that they can engage with Chinese consumers directly through major virtual marketplaces. YeePay, a leading Chinese travel payment company, also recently announced that it is now able to provide payment to customers outside China – a potential transaction volume of more than EUR 17 billion.

At the same time, Chinese brands are also tapping into new markets outside of China to reach the international consumer base. The growth rate for Singles Day sales is declining, which suggests that the local market has already reached saturation, and there is a need for retail brands to look at new avenues of growth outside of their country. For China and international retailers to embrace a global sales strategy, having access to partners and solutions that can fill in payment capability gaps, advance end customer goals and reduce operational complexity is key to fulfilling their cross-border visions with greater ease and agility.

Tourism is king, so is borderless payments

The future of retail also extends beyond the online space. According to a statement from Ant Financial, citing government data, more than 30 million international visitors are entering China and spending up to US$73.1 billion in the country last year. This means that brick-and-mortar retailers need to provide seamless and convenient payment methods for tourists.

Meanwhile, international players can also reap profits from Chinese travelers who are spending while on holiday. According to statistics from the China National Tourism Administration, Chinese travelers made about 131 million international trips in 2017, with that number expected to increase to 200 million by 2020.

An increase in broadband and mobile penetration around the globe has generated new waves of sophisticated shoppers – who demand a consistent and delightful shopping experience that straddles between both offline and online. This includes being able to pay through the platform and currency they prefer. Many retailers in Europe have started to integrate mobile apps into their payment methods. Munich Airport, which has seen a large influx of Chinese tourists over the past years, now allows Chinese tourists to pay via Alipay App, simplifying the entire checkout process and boosting revenue for retailers.

Another borderless payment solution is the RHB TravelFX multi-currency card, Singapore’s first multi-currency card. Customers are given full control over the FX rates that they buy at by setting in-app alerts for their preferred rates. The card also allows them to exchange for foreign currencies and pay in local currency anywhere, anytime – enhancing the travelling experience.

Encouraging cross-border loyalty

To optimize the integration of cross-border commerce, brands should also pay attention to loyalty programs that extend across the border and currencies.

Apps like the B Infinite, an initiative of Berjaya, one of Malaysia’s largest retail conglomerates, enables users to redeem digital points and vouchers on their smartphones, regardless of where they were originally issued or where the customer resides. This reflects a fully digitalized, borderless payments future.

Over time, these cross-border loyalty programs will provide a convenient and uniform shopping experience for customers, helping to build brand preference. To take this borderless vision further, brands need to subscribe to the latest omnichannel solutions, which can be used across all sales channels – online, mobile and at the point-of-sale, making the process as seamless as possible.

Driving the future of global payments

E-commerce sales are projected to account for up to 22 percent of worldwide retail sales by 2023, up from 14.1% this year, according to Statista. With much development potential for cross-border commerce and payments, brands should consider incorporating smart technologies such as artificial intelligence (AI) into their e-commerce and payment platforms.

AI can break down barriers and create more avenues for cross-border commerce. Taobao, China’s largest online marketplace, is already using AI to help sight-impaired users to shop, making its platform more inclusive and user-friendly. Meanwhile, emerging technologies like biometric terminals that allow users to pay with just the scanning of their hand or fingerprint can make cross-border commerce even more seamless without the need for multi-step authentication and international accounts.

The future of retail will be intrinsically tied to the development of emerging technologies that not only simplifies the customer experience but also enhances it. To fully realize the immense opportunities smart technologies can bring, brands need to continually evaluate their consumers’ path to purchase and look at ways in which they can continue providing value to new and existing customers. The ease of payment is not always something brands think about – but increasingly there’s a need to.

With the region leading the charge in cross-border commerce, consumers will be expecting a seamless experience, and to that end, brands need to integrate a diverse range of payment options that can cater to their preference. Only by doing so can they extend their offerings to a global scale and offer their customers a modern and innovative experience.

Carine Low is the regional head of marketing and communications in Asia Pacific at Wirecard