Alipay takes another crack at offline payment market

(ECNS) - Alipay, a third-party online payment platform and subsidiary of Alibaba Group, is making a comeback in the offline payment market, a move that analysts call "a general offensive" against its state-backed rival China UnionPay.

Alipay has been preparing the service in the Ningxia Hui autonomous region and Jiangxi province, the National Business Daily reported on Wednesday.

In March 2012, Alipay began its offline point-of-sale payment service with an investment of 500 million yuan ($80.4 million), but it stopped the service in August 2013 over what analysts said was a backlash from China UnionPay.

In a new effort to reenter the offline payment market, Alibaba teamed with nearly 100 brands and about 20,000 stores offline for the shopping carnival "Double 12" (December 12), giving 50 percent discounts to customers through its mobile app Alipay Wallet.

Meanwhile, Alibaba's Taobao Marketplace also faces a loss of market share with competition from Jingdong Mall, Tencent and Amazon.

The competition requires Alibaba to transfer its focus from commodity transactions online to everyday transactions, which means cooperation with offline stores, according to Qian Haili, an analyst with the Department of Internet Banking at the China Electronic Commerce Research Center.

UnionPay dominates the offline payment market, but there is rapid development as O2O, Alibaba, Baidu and Tencent all launch mobile payment solutions.

Compared with traditional offline payments made by swiping credit cards, mobile payments are convenient, fast and flexible, says Qian.

The offline payment market covers the frequent transactions in people's daily lives, such as clothing, food and transportation, which makes it a huge market, adds Qian.