Wal-Mart Stores Inc. announced today that shoppers can check out with the Alipay mobile app in 25 Wal-Mart stores in Shenzhen, China.
At checkout, the consumer shows a bar code in the Alipay mobile app to a cashier, and the cashier scans the code to verify the payment. Alipay says the payment process takes three seconds. Alipay is a PayPal-like payment service from Alibaba Group Holding Ltd. that originated as a way to pay online and now is being introduced into stores.
About 40,000 supermarkets or convenient stores operated by 70 retail chains, including Carrefour, 7-Eleven and Auchan, accept the Alipay mobile payment app in their stores in China, according Alipay.
Ant Financial Services Group, a financial affiliate of Alibaba, operates Alipay and has 270 million monthly active users in China.
Wal-Mart says consumers increasingly prefer to pay by mobile devices, and that mobile payment has become a critical component of its cross-channel strategy.
In addition, working with Alipay allows Wal-Mart to access more data about consumer behavior, including shopping habits, shopping routes and credit ratings to offer consumers more personalized products or services, Wal-Mart says. Alipay gathers such data as the age, location and shopping preferences of its users, and in some cases provides that data to retailers that accept Alipay. Wal-Mart also noted that working with the payment service will allow it to market to Alipay followers on Chinese social networks.
Wal-Mart says it eventually will accept Alipay in all its stores in China. Wal-Mart, No. 3 in the Internet Retailer 2015 Top 500 Guide, entered China in 1996 and operates 412 stores in 165 Chinese cities. It also owns 51% of Chinese online grocery retailer Yihaodian, No. 7 in the Internet Retailer China 500.
Another big U.S. company, McDonald’s Corp. recently has begun mobile marketing tests with Alipay, making use of the demographic data that Alipay collects. McDonald’s sent 2 million free sundae coupons to women ages 18 to 35 who were within 3,000 meters of a McDonald’s restaurant in five Chinese cities, Alipay says. 32% of recipients redeemed the coupon within 20 days and the fast-food chain gained 1 million followers on its social media account, according to Alipay.