Chinese video-sharing giants rush into the payment field
ByteDance has applied for the registration of the “Doupay” trademark, which is classified under the international classification of scientific instruments and website services, and the trademark status is “trademark application pending,” according to Cailian Press, a Chinese online business media start-up.
In September, ByteDance gained an online payment license by acquiring a Wuhan-based company; coupled with four financial permits, its intention in the payment and financial business is obvious.
With the e-commerce and live streaming boom, the giants are seeking their closed-loop e-commerce through integrating e-commerce, payment, commodities, and other aspects. Among them, the price has become an indispensable demand. Analysts believe that Internet giants are increasingly pursuing the comprehensive capability output of “payment + technology” and the compliance considerations of carrying out payment business.
According to commercial information, ByteDance applied for the trademark “Doupay” on November 18, 2020. Publicly available data shows that it has been used for the trademark “Doupay” several times before, but the applications have been unsuccessful and rejected. In addition, the goods/services included in the application also contain “downloadable computer programs” and “downloadable mobile applications.”
In addition to compliance considerations, Wang Pengbo, a senior analyst in the financial industry, told Cailian Press that the value of obtaining a payment license for enterprises is mainly for their e-commerce business: firstly, it can lower the corresponding payment channel service fees and earn the related reserve fund interest; secondly, it can obtain the underlying payment data, which facilitates enterprises to build a more detailed image of consumers and merchants for subsequent refined operation and business development. This is an excellent value for the e-commerce business of these Internet companies.
Douyin has already been regarded as a rival in the social networking field, like WeChat. As of August 2020, the daily active users of Douyin have exceeded 600 million, according to Kelly Zhang Nan, the head of Douyin. With a massive base of sticky users and a functional payment business layout, can its payment business become the third strength in addition to WeChat and Alipay?
“I think it will be difficult in the short term,” Wang Pengbo told Cailian Press, adding that consumers’ usage habits have stabilized. Without great discounts, it may be difficult for most consumers to quickly change their payment product habits.
In the current payment landscape, WeChat and Alipay, the traditional payment giants, have a stable market in the C-party. According to historical reports of iResearch, in Q2 2020, China’s third-party mobile payment transaction scale was 59.8 trillion yuan, up 8.8% year-on-year; Alipay and Tenpay occupy 55.6% and 38.8% of the market share, respectively. It is difficult to quickly change the pattern of dual oligopoly in the payment market.
In addition to user habits, comparing ByteDance and Kuaishou with Alibaba and JD.com is difficult due to their different business positioning and underlying ecology. ByteDance and Kuaishou are more of an information platform and a social network, and their derivatives, e-commerce, and payment, are part of a move to improve the ecological chain.
At the same time, some of their customers also can be converted into e-commerce and payment users. Still, its e-commerce business is difficult to become the next Alibaba and JD.com, so its payment is also challenging to become the next Alipay and WeChat Pay.
Besides, the recent suspension of the listing of Ants and the strong regulatory oversight of financial technology has challenged the development of Internet giants in payment and other financial services. The report pointed out that China’s Internet payment market has not yet found a new outbreak point of scale after the disappearance of online lending. Currently, more and more Internet payment companies are shifting from pursuing transaction scale to the purpose of “payment + technology” comprehensive capability output. They are transforming “quantity” to “quality.”
Nowadays, financial licenses with high monetary value and conducive to digital transformation, such as payment and consumer finance, have become the “standard equipment” of the giants. These financial licenses are not only conducive to improving the financial business segment. Still, they are also capable of being used in the digital economy, which can promote the digital transformation of the giants in the context of deepening digital development.
This is an article from Holobase https://www.holobase.io/research/5fc4b0efc80d910b32d649fe, written by Sun Shiyu and translated by Chris Yuan.