Latest research from iResearch shows that in Q2 2014, China third-party mobile payment industry had a negative growth for the first time after consecutive growth rate of 100% in the previous quarters. The decline was mainly due to the mass drop of funds subscription led by the money market fund Yu Ebao. In Q1 2014, with the annual earnings up to 7%, Yu Ebao was in extremely hot sale, which became a universal phenomenon. However, with the slump of monetary fund earning rate in Q2 2014, the volume of newly increased subscription declined, and even some funds saw net redemption.
iResearch analyses that the hot sale of fund in Q1 left valuable “legacy”, the fact that mobile payment users have increased and users have developed the habit of using mobile payment. Internet users were more reliable on payment app. In addition, mobile shopping, online lottery purchasing, repayment and accounts transfer all increased by a large margin.
The same report shows that although Alipay’s share in fund subscription market shrank, it retained the leading status in mobile payment market, and its market share showed continuous growth trend. Tenpay witnessed decreasing market share, mainly because the purchase of Li Caitong funds slumped significantly. Even one of the funds saw net redemption. Moreover, WeChat didn’t add any new business features to the social networking and shopping, and its transaction volume was still at a low level. However, this was just the first time for WeChat to do payment business, so it still owned high market expectation. Lakala kept the relatively fast increase in Q2 2014. The new O2O community ecommerce is expected to be the largest pillar for its transaction in the future.
Furthermore, mobile payment represented by Baidu Wallet and Yifubao Wallet saw great increase in Q2. In this quarter, the newly published Baidu Wallet ranked within top ten with the market share of 0.1%. Also, the mobile card readers such as Qiandai Bao and iBOXPAY were making efforts on the mobile bill charging market for small and micro-sized companies. Additionally, some mobile payment products under telecom operators like China Mobile NFC and China Telecom Bestpay were striving to develop NFC payment used in daily life by their parent companies’ advantages. Finally, with the representative of Lianlianpay, mobile payment enterprises have made great breakthrough in exploring large merchants.
In Q2 2014, great changes happened to the using scenarios of China third-party mobile payment compared to Q1: the share of personal services went up from 42.7% to 50.3%, and that of mobile shopping also increased by 1.6%. In contrast, fund subscription’s share experienced drop from 47.2% to 38.7%. With earnings declining, the sales of monetary fund like Yu Ebao and Li Caitong cooled down.
iResearch analyses that NFC-based payment under three telecom operators (China Mobile, China Unicom and China Telecom) will be the new breaking point of mobile payment development in the next quarter. Mobile payment players will particularly focus on offline scenarios.
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