China’s Alipay digital wallet is entering 7,000 Walgreens stores

China’s payments heavyweights have been following tourists abroad as their home market gets crowded. Ant Financial, Alibaba’s financial affiliate with a said valuation of $100 billion, now sees its virtual wallet Alipay handling transactions at 3,000 Walgreens stores in the U.S. and is eyeing to reach a roster of 7,000 locations by April. The alliance will […]

China’s payments heavyweights have been following tourists abroad as their home market gets crowded. Ant Financial, Alibaba’s financial affiliate with a said valuation of $100 billion, now sees its virtual wallet Alipay handling transactions at 3,000 Walgreens stores in the U.S. and is eyeing to reach a roster of 7,000 locations by April.

The alliance will make it breezier for Chinese tourists eager to pick up vitamin supplements and cosmetics from the pharmacy giant, doing away the hassle of carrying cash around. There’s also an economic incentive as Alipay and its payments peers typically charge lower foreign transaction fees than credit card firms.

Walgreens products are already available to Chinese shoppers through Alibaba’s Tmall online marketplace, which connects customers to brands. It competes with JD.com to bring high-quality overseas products to the country’s increasingly demanding consumers.

According to a Nielsen report released last year, more than 90 percent Chinese tourists said they would use mobile payment overseas if given the option. Digital payments have become a norm in China’s urban centers and top policymakers are planning to replicate that cashless ubiquity among rural villagers by 2020, announced a set of new guidelines this week.

Ant Financial is continuing its aggression in North America despite a major fiasco last year when the U.S. government killed its $1.2 billion plan to buy money transfer firm MoneyGram, a deal that could boost Ant’s global remittance capability. Within the American borders, Ant has tapped into its partners’ retail networks. By March last year, Alipay was accepting money across 35,000 merchants through its tie-up with local payments processor First Data.

alipay us walgreens

Alipay is currently available at 3,000 Walgreens stores in the U.S. / Photo: Ant Financial

Digital payments are especially popular with first-time outbound tourists, many of whom hail from smaller Chinese cities and may not own international credit cards. According to a recent report published by Ant, the number of people from third-and-fourth-tier cities who used Alipay abroad was up 230 percent during this past Lunar New Year.

“This really highlights how mobile payment is taking root in China’s outbound tourism market,” said Janice Chen, head of the business operation for Alipay’s cross-border unit. Overseas usage from travellers born between 1960 and 1979 similarly saw robust growth last week.

Alipay’s big push into North American also includes its foray into Canada. In one instance, diners in Vancouver, Calgary and Edmonton — destinations that draw a lot of Chinese tourist and students — can now use Alipay to order food and skip restaurant lines. The setup comes from a deal between Ant Financial and Canadian food startup ClickDishes.

Alipay’s archrival WeChat Pay has also flexed its muscles overseas. To chase after Chinese tourists, the Tencent-owned wallet recently pushed into Japan through a partnership with chat app Line. In Hong Kong and Malaysia, WeChat has attempted to get a slice of the indigenous payments market by running localized versions of the wallet and luring users with money. During Lunar New Year, WeChat Pay shelled out millions of digital hongbao — red packets filled with cash traditionally handed out during the festive period — to users in these two regions.

China’s Alipay digital wallet is entering 7,000 Walgreens stores

China’s payments heavyweights have been following tourists abroad as their home market gets crowded. Ant Financial, Alibaba’s financial affiliate with a said valuation of $100 billion, now sees its virtual wallet Alipay handling transactions at 3,000 Walgreens stores in the U.S. and is eyeing to reach a roster of 7,000 locations by April. The alliance will […]

China’s payments heavyweights have been following tourists abroad as their home market gets crowded. Ant Financial, Alibaba’s financial affiliate with a said valuation of $100 billion, now sees its virtual wallet Alipay handling transactions at 3,000 Walgreens stores in the U.S. and is eyeing to reach a roster of 7,000 locations by April.

The alliance will make it breezier for Chinese tourists eager to pick up vitamin supplements and cosmetics from the pharmacy giant, doing away the hassle of carrying cash around. There’s also an economic incentive as Alipay and its payments peers typically charge lower foreign transaction fees than credit card firms.

Walgreens products are already available to Chinese shoppers through Alibaba’s Tmall online marketplace, which connects customers to brands. It competes with JD.com to bring high-quality overseas products to the country’s increasingly demanding consumers.

According to a Nielsen report released last year, more than 90 percent Chinese tourists said they would use mobile payment overseas if given the option. Digital payments have become a norm in China’s urban centers and top policymakers are planning to replicate that cashless ubiquity among rural villagers by 2020, announced a set of new guidelines this week.

Ant Financial is continuing its aggression in North America despite a major fiasco last year when the U.S. government killed its $1.2 billion plan to buy money transfer firm MoneyGram, a deal that could boost Ant’s global remittance capability. Within the American borders, Ant has tapped into its partners’ retail networks. By March last year, Alipay was accepting money across 35,000 merchants through its tie-up with local payments processor First Data.

Alipay is currently available at 3,000 Walgreens stores in the U.S. / Photo: Ant Financial

Digital payments are especially popular with first-time outbound tourists, many of whom hail from smaller Chinese cities and may not own international credit cards. According to a recent report published by Ant, the number of people from third-and-fourth-tier cities who used Alipay abroad was up 230 percent during this past Lunar New Year.

“This really highlights how mobile payment is taking root in China’s outbound tourism market,” said Janice Chen, head of the business operation for Alipay’s cross-border unit. Overseas usage from travellers born between 1960 and 1979 similarly saw robust growth last week.

Alipay’s big push into North American also includes its foray into Canada. In one instance, diners in Vancouver, Calgary and Edmonton — destinations that draw a lot of Chinese tourist and students — can now use Alipay to order food and skip restaurant lines. The setup comes from a deal between Ant Financial and Canadian food startup ClickDishes.

Alipay’s archrival WeChat Pay has also flexed its muscles overseas. To chase after Chinese tourists, the Tencent-owned wallet recently pushed into Japan through a partnership with chat app Line. In Hong Kong and Malaysia, WeChat has attempted to get a slice of the indigenous payments market by running localized versions of the wallet and luring users with money. During Lunar New Year, WeChat Pay shelled out millions of digital hongbao — red packets filled with cash traditionally handed out during the festive period — to users in these two regions.

No, Tencent isn’t about to burn Reddit down

Ahoy, it’s doom and gloom for Reddit after the company welcomed investment from Chinese censorship overlord Tencent. Well, not quite. The reality is, in fact, it’s quite the opposite. In recruiting the company behind one of the internet’s largest and vibrant social networks — chat app WeChat — and countless blockbuster games, Reddit has pulled off […]

Ahoy, it’s doom and gloom for Reddit after the company welcomed investment from Chinese censorship overlord Tencent.

Well, not quite.

The reality is, in fact, it’s quite the opposite. In recruiting the company behind one of the internet’s largest and vibrant social networks — chat app WeChat — and countless blockbuster games, Reddit has pulled off a major coup and banked a huge amount of cash, both of which can help it grow to the next level.

But, right now, reports in the U.S. are suggesting otherwise. You might have seen a range of negative stories surface in the past week following Reddit’s latest round of investment — first reported by TechCrunch — which is led by Tencent and values the company at $3 billion.

Triggered by a Gizmodo story last week, fear is being stoked that a deal with the “Chinese censorship powerhouse” could lead Reddit awry and bankrupt its morality, well, whatever of that it has left. Reddit users, not ones to be slow on humor, have already plastered the site with content that would be forbidden in China, including Winnie the Pooh, the cartoon character often used to represent Chinese President Xi Jinping.

Gizmodo referred to Tencent as “one of the most important architects of the Great Firewall,” and that’s a refrain that has been repeated in countless other reports.

I get it, it‘s a delicious irony; one of the lawless parts of the internet combining forces with a company that aggressively monitors and censors its users. Plus, Reddit is already blocked in China.

But, unfortunately for Gizmodo, the fears are overblown and its descriptions of Tencent are at best naive and at worst deliberately misguided.

China’s censorship system

Tencent is no “architect” of China’s Great Firewall internet censorship program. It’s one of a number of companies which, from its success, finds itself a prominent target for the government with little room to wiggle out.

Tencent sits in an awkward position, for sure. It is the largest internet company in China — it became the first $500 billion firm in Asia last year — and that makes it a core part of the government’s ongoing campaign to control Chinese internet space.

After an unprecedented crackdown on the Twitter-like service Weibo in 2012, when the government closed down comments for three days, China’s censorship became more proactive rather than reactive. That approach leaves fewer traces, for one thing, and it allows Beijing to shift responsibility to the platforms themselves, which fear the repercussions of angering authorities.

That’s to say that today’s dynamic sees China’s top internet companies, including Tencent, instructed to monitor the content produced by their users and, where necessary, remove it.

Reddit CEO Steve Huffman delivers remarks on “Redesigning Reddit” during the third day of Web Summit in Altice Arena on November 08, 2017 in Lisbon, Portugal. Web Summit.

Censoring social networks is one thing, but censoring WeChat — Tencent’s prized asset and China’s top messaging app with more than a billion monthly users — is another thing altogether. Tencent has been roundly (and rightly) criticized for implementing a range of “silent” blocks that, for some terms, prevent messages from being sent or picked up by the receiver.

Likewise, it has also purged millions of accounts from WeChat following numerous rounds of government-led initiatives that crack down on media, pornography and unsubstantiated rumors.

Those crackdowns and censorship moves are not false, but Gizmodo is painting a picture that suggests Tencent is complicit in cleaning its slate.

The truth is that the company, even a company of its size, has no choice in the matter when the Chinese government comes knocking with demands. To ignore the summons, or fail to act, would cause Tencent — a publicly listed company — serious problems that would not reflect well for shareholders. Adhering to these demands is expensive and resource-intensive, as it requires a new “content checking” division with specialist employees hired and trained. In short, it is certainly not something companies willingly opt-in to.

A rite of passage

Tencent is definitely not in control of the agenda, as anyone with an eye on tech in China can tell you. The company suffered a poor end to 2018, in part because the Chinese government decided to freeze new game licenses.

That left Tencent unable to monetize its new roster of games, a situation that saw it lose countless hundreds of millions in revenue and saw its share price drop by nearly 50 percent between March and October. The freeze has only just thawed, with a handful of licenses tentatively distributed this year.

So much for the Chinese government looking after their own.

These issues affect every tech company in China with a meaningful presence. Getting hit by government demands and censorship requests is a rite of passage for tech startups in China, like a dreaded badge of honor that shows your service has grown suitably influential to be considered a threat.

That happened to ByteDance, the company behind TikTok, the current social darling for many U.S. media. Last year, its CEO was forced to issue a groveling apology after it had “overemphasized growth and scale over quality and responsibility.”

The company resolved to increase its content checkers (read, censorship police) from 6,000 to 10,000 people, a move likely made to appease the government. Still, it was made an example of, with a number of TikTok apps removed from app stores and shuttered on the word of authorities.

Welcome to the club!

But it isn’t just Chinese companies.

Tencent became Asia’s first $500 billion company thanks to a stock rally — today it is worth around $425 billion [Photographer: Qilai Shen/Bloomberg via Getty Images]

Choices

Apple, the self-proclaimed protector of freedom, removed every unlicensed VPN from its China-based App Store at the behest of the government in 2017. While, in a rare move that runs counter to its core privacy focus, it relented to state rules and agreed to store Chinese iCloud user data on Chinese soil, through a government-backed cloud service provider, no less.

The difference between Apple and the likes of Tencent and ByteDance is that the U.S. company has a choice. It entered China voluntarily and it has complied with free speech-quashing demands to keep its revenue flowing.

Tencent and ByteDance, as the biggest internet players, would have a tough time moving outside of their native China and remaining in business. Maybe, in today’s censorship-heavy era, some Chinese companies wish they had started out in Hong Kong or another domain, but few markets have the opportunity that comes with 800 million internet users.

The point is that they have no control over censorship demands and no leverage to push back. To blame them — and paint them as co-conspirators, even “architects” — is misleading.

Tencent, in fact, has a reputation as a skillful investor that can be an asset for non-Chinese companies.

Its capital and guidance helped Fortnite creator Epic Games completely revamp its business into the smash hit success that it is today. Elsewhere, Tencent is the largest single investor in Snap — CEO Evan Spiegel has said he often seeks its guidance — and its other deals include Tesla, Discord, Kik and more, none of which have resulted in the introduction of censorship.

Yes, Reddit and Tencent are strange bedfellows, but that’s exactly the point of venture capital. The best founders surround themselves with different opinions, perspectives and experiences to ensure that they are evaluating all possible strategies. Tencent can give Reddit unique insight which, for those who use it, can only be a net positive for the future health of Reddit’s business and continued service.

No, Tencent isn’t about to burn Reddit down

Ahoy, it’s doom and gloom for Reddit after the company welcomed investment from Chinese censorship overlord Tencent. Well, not quite. The reality is, in fact, it’s quite the opposite. In recruiting the company behind one of the internet’s largest and vibrant social networks — chat app WeChat — and countless blockbuster games, Reddit has pulled off […]

Ahoy, it’s doom and gloom for Reddit after the company welcomed investment from Chinese censorship overlord Tencent.

Well, not quite.

The reality is, in fact, it’s quite the opposite. In recruiting the company behind one of the internet’s largest and vibrant social networks — chat app WeChat — and countless blockbuster games, Reddit has pulled off a major coup and banked a huge amount of cash, both of which can help it grow to the next level.

But, right now, reports in the U.S. are suggesting otherwise. You might have seen a range of negative stories surface in the past week following Reddit’s latest round of investment — first reported by TechCrunch — which is led by Tencent and values the company at $3 billion.

Triggered by a Gizmodo story last week, fear is being stoked that a deal with the “Chinese censorship powerhouse” could lead Reddit awry and bankrupt its morality, well, whatever of that it has left. Reddit users, not ones to be slow on humor, have already plastered the site with content that would be forbidden in China, including Winnie the Pooh, the cartoon character often used to represent Chinese President Xi Jinping.

Gizmodo referred to Tencent as “one of the most important architects of the Great Firewall,” and that’s a refrain that has been repeated in countless other reports.

I get it, it‘s a delicious irony; one of the lawless parts of the internet combining forces with a company that aggressively monitors and censors its users. Plus, Reddit is already blocked in China.

But, unfortunately for Gizmodo, the fears are overblown and its descriptions of Tencent are at best naive and at worst deliberately misguided.

China’s censorship system

Tencent is no “architect” of China’s Great Firewall internet censorship program. It’s one of a number of companies which, from its success, finds itself a prominent target for the government with little room to wiggle out.

Tencent sits in an awkward position, for sure. It is the largest internet company in China — it became the first $500 billion firm in Asia last year — and that makes it a core part of the government’s ongoing campaign to control Chinese internet space.

After an unprecedented crackdown on the Twitter-like service Weibo in 2012, when the government closed down comments for three days, China’s censorship became more proactive rather than reactive. That approach leaves fewer traces, for one thing, and it allows Beijing to shift responsibility to the platforms themselves, which fear the repercussions of angering authorities.

That’s to say that today’s dynamic sees China’s top internet companies, including Tencent, instructed to monitor the content produced by their users and, where necessary, remove it.

Reddit CEO Steve Huffman delivers remarks on “Redesigning Reddit” during the third day of Web Summit in Altice Arena on November 08, 2017 in Lisbon, Portugal. Web Summit.

Censoring social networks is one thing, but censoring WeChat — Tencent’s prized asset and China’s top messaging app with more than a billion monthly users — is another thing altogether. Tencent has been roundly (and rightly) criticized for implementing a range of “silent” blocks that, for some terms, prevent messages from being sent or picked up by the receiver.

Likewise, it has also purged millions of accounts from WeChat following numerous rounds of government-led initiatives that crack down on media, pornography and unsubstantiated rumors.

Those crackdowns and censorship moves are not false, but Gizmodo is painting a picture that suggests Tencent is complicit in cleaning its slate.

The truth is that the company, even a company of its size, has no choice in the matter when the Chinese government comes knocking with demands. To ignore the summons, or fail to act, would cause Tencent — a publicly listed company — serious problems that would not reflect well for shareholders. Adhering to these demands is expensive and resource-intensive, as it requires a new “content checking” division with specialist employees hired and trained. In short, it is certainly not something companies willingly opt-in to.

A rite of passage

Tencent is definitely not in control of the agenda, as anyone with an eye on tech in China can tell you. The company suffered a poor end to 2018, in part because the Chinese government decided to freeze new game licenses.

That left Tencent unable to monetize its new roster of games, a situation that saw it lose countless hundreds of millions in revenue and saw its share price drop by nearly 50 percent between March and October. The freeze has only just thawed, with a handful of licenses tentatively distributed this year.

So much for the Chinese government looking after their own.

These issues affect every tech company in China with a meaningful presence. Getting hit by government demands and censorship requests is a rite of passage for tech startups in China, like a dreaded badge of honor that shows your service has grown suitably influential to be considered a threat.

That happened to ByteDance, the company behind TikTok, the current social darling for many U.S. media. Last year, its CEO was forced to issue a groveling apology after it had “overemphasized growth and scale over quality and responsibility.”

The company resolved to increase its content checkers (read, censorship police) from 6,000 to 10,000 people, a move likely made to appease the government. Still, it was made an example of, with a number of TikTok apps removed from app stores and shuttered on the word of authorities.

Welcome to the club!

But it isn’t just Chinese companies.

Tencent became Asia’s first $500 billion company thanks to a stock rally — today it is worth around $425 billion [Photographer: Qilai Shen/Bloomberg via Getty Images]

Choices

Apple, the self-proclaimed protector of freedom, removed every unlicensed VPN from its China-based App Store at the behest of the government in 2017. While, in a rare move that runs counter to its core privacy focus, it relented to state rules and agreed to store Chinese iCloud user data on Chinese soil, through a government-backed cloud service provider, no less.

The difference between Apple and the likes of Tencent and ByteDance is that the U.S. company has a choice. It entered China voluntarily and it has complied with free speech-quashing demands to keep its revenue flowing.

Tencent and ByteDance, as the biggest internet players, would have a tough time moving outside of their native China and remaining in business. Maybe, in today’s censorship-heavy era, some Chinese companies wish they had started out in Hong Kong or another domain, but few markets have the opportunity that comes with 800 million internet users.

The point is that they have no control over censorship demands and no leverage to push back. To blame them — and paint them as co-conspirators, even “architects” — is misleading.

Tencent, in fact, has a reputation as a skillful investor that can be an asset for non-Chinese companies.

Its capital and guidance helped Fortnite creator Epic Games completely revamp its business into the smash hit success that it is today. Elsewhere, Tencent is the largest single investor in Snap — CEO Evan Spiegel has said he often seeks its guidance — and its other deals include Tesla, Discord, Kik and more, none of which have resulted in the introduction of censorship.

Yes, Reddit and Tencent are strange bedfellows, but that’s exactly the point of venture capital. The best founders surround themselves with different opinions, perspectives and experiences to ensure that they are evaluating all possible strategies. Tencent can give Reddit unique insight which, for those who use it, can only be a net positive for the future health of Reddit’s business and continued service.

Chat app Line injects $182M into its mobile payment business

Japanese messaging app company Line is pumping 20 billion JPY ($182 million) into its mobile payment business as it tries to turn things around following a challenging year in 2018. The company announced the infusion into Line Pay, a subsidiary that it fully owns, in a filing which stated that the new capital is “necessary […]

Japanese messaging app company Line is pumping 20 billion JPY ($182 million) into its mobile payment business as it tries to turn things around following a challenging year in 2018.

The company announced the infusion into Line Pay, a subsidiary that it fully owns, in a filing which stated that the new capital is “necessary funds for its future business operation.” No further details were provided.

The investment comes on the heels of Line’s latest financial report which saw it post a 5.79 billion JPY loss as revenue grew by 24 percent to reach 207.18 billion JPY in 2018. Line has long been a top money maker in the App Store, but its efforts to build out content around its messaging platform and games division have turned out to be expensive, with a job service, manga platform and e-commerce business among its ventures.

In addition to additional content, payments are also seen as ‘glue’ that can increase engagement within the Line ecosystem and its main messaging app.

The company is going after the cashless opportunity in Japan, where it is the dominant chat app with an estimated 50 million registered users. The country is notable for its continued use of cash, but the government is using the upcoming 2020 Olympic Games as an opportunity to move towards a digital future. Aside from its core Line Pay service, which sits inside the Line chat app, Line is introducing its own credit card with Visa and it has gone after Chinese tourists through a tie-in with Tencent, the internet giant behind China’s top messaging app WeChat.

Outside of Japan, Line Pay is also available in Thailand (where it works with the Bangkok metro provider), Taiwan (where it counts two banks as partners) and Indonesia, which Line says are its next three largest markets in terms of user numbers. Together, across those four countries, Line claims it has 165 million monthly active users and 40 million registered Line Pay users. Line said GMV reached 55 billion JPY ($482 million) per month back in November 2017, there’s been no update since.

The service was launched more widely but it has shuttered in other markets, including Singapore where it was ended in February 2018.

Beyond payment, Line is also moving into banking and financial services. It is working to launch a digital bank in Japan and last year it announced plans to investigate the potential to roll out loans, insurance and other services backed by its own cryptocurrency. While it didn’t hold an ICO — its ‘Link’ token is earned or can be bought on exchanges — Line did dive into crypto in a major way, opening its own exchange and starting a crypto investment fund, too. With the bear market in full effect, and token valuations dropping by 90 percent across the board, we haven’t heard too much more from Line on its crypto plans.

Chat app Line’s mobile payment service is getting its own Visa card

Brown, Cony and the gang are coming to a credit card near you in Japan. Line, the messaging app company behind the cute sticker characters, announced today that it is bringing its payment service to plastic through a tie-in with Visa. Line is Japan’s largest chat app with an estimated 50 million registered users. The cards […]

Brown, Cony and the gang are coming to a credit card near you in Japan. Line, the messaging app company behind the cute sticker characters, announced today that it is bringing its payment service to plastic through a tie-in with Visa.

Line is Japan’s largest chat app with an estimated 50 million registered users. The cards will be released later this year and they’ll allow Line Pay, the company’s digital wallet service, to stretch beyond its existing merchant base to allow users to pay at any retailer accepting Visa . In addition, the first year of use will see customers get 3 percent of their spending back in Line’s ‘Points’ virtual currency, which is used to buy stickers and other content.

The partnership is a step up from Line’s own payment cards, which were introduced in 2016 and supported by JCB.

It’s an interesting deal because mobile is generally seen as being the future form factor for payments. In China, for example, using cash or card to pay is considered antiquated — you’ll get glares from other patrons forced to wait while you complete your transaction — but digital payments face a struggle in most other markets.

WeChat and Alipay have become de facto in China, but retailers — and particularly smaller ones — don’t always have the awareness, confidence or resources to add support for Line or other digital wallets. Japan, where cash is still king, is perhaps most emblematic of that struggle. The government is making a sustained push towards cashless — particularly ahead of the 2020 Olympics — and Line, as the country’s dominant chat app, may help that along with this partnership.

Line wrapped up a deal with WeChat last November that allows users of the China-based chat app to make payment via Line Pay points of sale. Tencent’s WeChat and Alipay from Alibaba have spent recent years developing a system that lets Chinese tourists pay while they are overseas.

Chat app Line’s mobile payment service is getting its own Visa card

Brown, Cony and the gang are coming to a credit card near you in Japan. Line, the messaging app company behind the cute sticker characters, announced today that it is bringing its payment service to plastic through a tie-in with Visa. Line is Japan’s largest chat app with an estimated 50 million registered users. The cards […]

Brown, Cony and the gang are coming to a credit card near you in Japan. Line, the messaging app company behind the cute sticker characters, announced today that it is bringing its payment service to plastic through a tie-in with Visa.

Line is Japan’s largest chat app with an estimated 50 million registered users. The cards will be released later this year and they’ll allow Line Pay, the company’s digital wallet service, to stretch beyond its existing merchant base to allow users to pay at any retailer accepting Visa . In addition, the first year of use will see customers get 3 percent of their spending back in Line’s ‘Points’ virtual currency, which is used to buy stickers and other content.

The partnership is a step up from Line’s own payment cards, which were introduced in 2016 and supported by JCB.

It’s an interesting deal because mobile is generally seen as being the future form factor for payments. In China, for example, using cash or card to pay is considered antiquated — you’ll get glares from other patrons forced to wait while you complete your transaction — but digital payments face a struggle in most other markets.

WeChat and Alipay have become de facto in China, but retailers — and particularly smaller ones — don’t always have the awareness, confidence or resources to add support for Line or other digital wallets. Japan, where cash is still king, is perhaps most emblematic of that struggle. The government is making a sustained push towards cashless — particularly ahead of the 2020 Olympics — and Line, as the country’s dominant chat app, may help that along with this partnership.

Line wrapped up a deal with WeChat last November that allows users of the China-based chat app to make payment via Line Pay points of sale. Tencent’s WeChat and Alipay from Alibaba have spent recent years developing a system that lets Chinese tourists pay while they are overseas.

Alibaba’s alternative to the app store reaches 230M daily users

WeChat isn’t the only one doubling down on lite apps. Ever since China’s messaging titan introduced “mini programs” two years ago, a handful of its peers including Alibaba and Baidu have followed with their own manifestations. Alipay, the payments solution affiliated with China’s ecommerce juggernaut Alibaba, today announced it surpassed 230 million daily active users and […]

WeChat isn’t the only one doubling down on lite apps. Ever since China’s messaging titan introduced “mini programs” two years ago, a handful of its peers including Alibaba and Baidu have followed with their own manifestations.

Alipay, the payments solution affiliated with China’s ecommerce juggernaut Alibaba, today announced it surpassed 230 million daily active users and 12 million lite apps. For some context, Tencent’s WeChat said it topped 200 million daily users and one million mini apps last November.

These stripped-down apps run within an all-in-one platform, or what some call the “super app,” allowing users to bypass the App Store. But not all native apps are replaceable by mini programs for the former support more functionalities and give developers more control in aspects like monetization and access to user insight.

Like WeChat, Alipay added a swipe-down menu on the app’s homepage for mini programs to enhance their visibility. The redesign boosts user revisits to lite apps by 20 times over the past month, Alipay claims.

The Chinese super apps are each bringing their own strengths to the mini-app play. Alipay is a digital wallet at heart, with 1 billion monthly active users around the world many of whom also consume its slew of third-party financial services. The top categories of Alipay’s mini apps, unsurprisingly, are services that see high-frequency transactions like retail, paying for utility bills and travel booking.

WeChat, on the other hand, is fundamentally a messenger and as such developers rush to leverage the social graphs from its 1 billion monthly users. Group-buying site Pinduoduo, for example, started as a mini program and effectively used WeChat’s social networks to grow its group-buying business. Eventually, millions of Pinduoduo’s core users migrated to its native app, setting the Tencent-backed ecommerce startup up against Taobao . Similarly, video games, especially casual ones, embrace mini programs for their smaller file size and ability to be shared across family members and friends.

WeWork could challenge Starbucks in China with new on-demand service

The rise of Starbucks in China, like that in the west, is closely linked to its function as a “third space” for people to hang out between home and work. In recent years, a bevy of coffee entrepreneurs are trying to topple the American giant’s dominance in China and lately, an unexpected contender — WeWork […]

The rise of Starbucks in China, like that in the west, is closely linked to its function as a “third space” for people to hang out between home and work. In recent years, a bevy of coffee entrepreneurs are trying to topple the American giant’s dominance in China and lately, an unexpected contender — WeWork — has joined their camp.

This month, the office tenant and workplace service provider launched WeWork Go, a new feature that allows China-based users to rent a desk by the minute so they are no longer tied to long-term leases. While Starbucks provides free accommodation and charges for coffee, WeWork flips the equation to offer free coffee and paid space. Starbucks is already being squeeze in China by emerging rival Luckin Coffee, a well-funded startup that explicitly pledges to take on the Seattle-based giant with a model that focuses on coffee delivery.

WeWork Go works a bit like other shared services, with an app that lets users check the occupancy of a list of offices in real time before they travel over. Upon arrival, users scan a QR code at the gate, pop the door open, get seated in the common area and the billing begins.

WeWork Go available through a WeChat mini program. Screenshot: TechCrunch

The firm says it monitors traffic flow closely so the common space isn’t flooded with fleeting users. Booking private rooms require additional fees. Go claims to have picked up 50,000 registered users so far after piloting for three months across an inventory of 18 locations in Shanghai, where WeWork nestles its China headquarters.

Made for China

Instead of building a native app, WeWork Go operates via a WeChat mini program, a form of a stripped-down app that works within China’s largest social network. Mini programs are an increasingly popular way for startups to trial ideas thanks to their relative ease to develop. “[Go] is a key development of our China localization,” a WeWork spokesperson told TechCrunch.

Go is tailoring to the so-called “part-time users.” “These people would not purchase the monthly membership. They would work at home or a coffee shop, restaurant, or library,” Dominic Penaloza, who heads innovation and technology at WeWork China, told TechCrunch. He first conceptualized the on-demand workplace service at Naked Hub, a smaller local rival WeWork China bought out for $400 million last year. After the merger, the executive alongside his tech team joined WeWork and continued with the project that would later become Go.

The pay-as-you-go feature is also getting rolled out stateside at a new Manhattan location last week.

Penaloza admits Go could be competing with coffee shops for it offers “an alternative type of the third space for freelancers, mobile workers, business travellers or those who want to briefly step aside from their offices for a mental break.” The obvious target is Starbucks, which commands a whopping 51 percent share of the country’s booming coffee market.

Made for WeWork

For WeWork, Go serves as a trial for those deciding whether to sign on monthly subscriptions. What they are weighing is the 1,830 yuan ($271) price tag for a hotdesk in downtown Shanghai. By comparison, Go starts at 15 yuan and goes up to 30 yuan an hour at more prime locations, offering the same perks as the full-time hotdesking plan, which includes access to common spaces, beverages and wifi.

Users can do their math. “If you started as a WeWork Go member, and if you use our service quite a lot, you will realize it’s much more economical to purchase monthly subscriptions. WeWork Go enables WeWork to reach an entirely new market segment,” suggests Penaloza.

The flexible pricing may help WeWork — which generates the bulk of its revenues from large corporations — reach a wider user base. The shared office industry in China has entered what real-estate researcher Jones Lang LaSalle calls the “second phase,” with big firms moving into premium workplaces like WeWork and local player Soho 3Q. Cash-strapped startups, on the other hand, increasingly turn to government-backed incubators for lower costs.

wework china

Photo: WeWork China

Several early users of Go told TechCrunch they found the service delivering a “quieter” and “more comfortable” vibe than most cafes, but distance is key when they are in a rush. WeWork currently has about 60 locations across a dozen major Chinese cities, whereas Starbucks reaches a dense network of 3,330 stores and is shooting for 6,000 by the end of 2022. WeWork China got a boost for locations with the Naked Hub acquisition last year and says it’s open to adding third-party spaces such as restaurants into its inventory, though it has not taken a solid step towards that vision.

“There is a very interesting opportunity in the really downtown area, where WeWork locations and Naked Hub locations are quite full starting from after lunch until 5 pm,” notes Penaloza. “What’s amazing is that restaurants around those locations are quite empty at exactly the same time, so there’s a fascinating opportunity there but we haven’t done anything about it yet.”

Meet the little-known Chinese WiFi startup that rubs shoulders with WeChat and Alipay

A service that connects people to WiFi hotspots for free turned out to be one of China’s most popular apps, nestling in the top ranks with Tencent’s WeChat messenger and Alibaba’s digital wallet affiliate Alipay. According to a report from app tracking service App Annie, WiFi Master Key was China’s fifth-largest app and the world’s ninth […]

A service that connects people to WiFi hotspots for free turned out to be one of China’s most popular apps, nestling in the top ranks with Tencent’s WeChat messenger and Alibaba’s digital wallet affiliate Alipay. According to a report from app tracking service App Annie, WiFi Master Key was China’s fifth-largest app and the world’s ninth largest by monthly active users in 2018, titles it also held in 2017.

Report: The State of Mobile 2019, App Annie

The aptly-named WiFi Master Key, which owns the enviable domain wifi.com, is the product of a little-known startup called LinkSure in Shanghai that gets people onto the nearest wireless networks without the need for passwords. In addition, the app also recommends news and video content based on users’ past habits to lock them in, a feature similar to that of ByteDance’s algorithm-driven Jinri Toutiao news app.

Like many consumer-facing services in China, the app is free to use and monetizes traffic through advertising. It claims 700 million MAUs in China and another 100 million around the world. WeChat and Alipay, by comparison, each has around 1 billion MAUs worldwide.

The internet connectivity service helped LinkSure secure $52 million from a Series A round and value the parent at $1 billion back in 2015, only two years after the firm had launched. LinkSure has not announced further fundings since then and has kept a relatively low profile, though its founder Chen Danian was a household name from China’s early internet days. Along with his brother Chen Tianqiao, Chen founded Shanda Games, once China’s largest operator of online games before the rise of Tencent.

In November, Chen resigned as LinkSure’s chief operating officer as former Shanda executive Wang Jingying took over the reins to become one of the few prominent female CEOs in China’s tech sector.

Sharing passwords

The idea of freeloading on strangers’ networks strikes one as dodgy (or too good to be true), but the reality is more nuanced. WiFi Master Key keeps a database of passwords while encrypts and hides them from users, the company explains on its site. How does it collect all the credentials in the first place? Well, every time someone uses it to key in a login, the internet access app transmits that piece of information to the cloud. When people use it to, say, enter the WiFi passcode a barista just gave them, the data gets stored and shared to whoever at the cafe that uses the app.

wifi master key

Aside from bringing connectivity, WiFi Master Key also provides news, e-book and video content to lock users in. Screenshot: TechCrunch

Those inner workings enable the app to bill itself as a WiFi “sharing” service and distance itself from anything that’s remotely a hack. But its data practice still draws concerns over user privacy. Last April, the Chinese state television broadcaster ran a 25-minute feature lambasting the app for “stealing passwords.” That was followed by an industry-wide crackdown from the state’s cybersecurity watchdog on all WiFi crowdsourcing services with lacklustre security practices.

LinkSure rebuked the state report and said it always asked for user consent before gleaning their data. Chances are few people read the lengthy terms of use on any kind of apps in real life, and the less digital savvy may fail to grasp how the app actually works. A major source of debate is when users inadvertently make their house WiFi publicly available after giving the credentials away to a guest who happens to use the data ravenous app to access the host’s network. WiFi Master Key has not responded to emailed questions about its security practices.

Aside from enabling strangers to crowdsource WiFi, LinkSure has also joined hands with two major Chinese telecommunication companies to offer a separate broadband card with appealing data plans. That puts it in competition with Tencent, Alibaba, Baidu and other tech firms that are working with big telcos to provide cheap or unlimited data enticing people to use their in-house apps.

Meanwhile, LinkSure is eying to beam down its own internet connection from the space as SpaceX and OneWeb do. The plan is to target the next few billion rural users who are just coming online and live in areas currently uncovered by terrestrial networks. LinkSure says it’s aiming to provide free satellite network around the world by 2026, with the first out of a constellation of 272 satellites bound to launch later this year.

A government-backed report put the number of people with internet access in China at 802 million in June, leaving nearly 600 million who are still unconnected. 30 million people came online for the first time last year, including an expanding base of elderly users who are increasingly embracing Alipay and WeChat to go about daily lives.