Ant Financial Services Group announced a strategic cooperation agreement with the Yangtze River Hutchison Industrial Co., Ltd. (Cheung Kong Hutchison) on September 26th. According to the agreement, they will jointly operate the electronic wallet of Alipay HK, the Hong Kong version of Alipay, aiming to develop both online and offline mobile payment services.
Back in 1999, Hong Kong Pacific Century Branch, an affiliate company of Li’s, invested an initial capital into Tencent (which went public in HK), the Chinese tech giant, whose star app WeChat has become the only opponent that could threaten Alipay.
84% of unsers from Mainland China claimed that they had got used to going out without taking any cash but only a mobile phone, according to a report released by China Tech Insights. By comparison the Hong Kong mobile payment market is far behind. Carrying a wallet is still a necessity for Hong Kong residents, and a large number of shops do not support mobile payment yet. As Hong Kong and Mainland China are getting closer, floods of tourists come to this attractive city for shopping or sightseeing. Hong Kong's mobile payment market has a great potential for numerous business opportunities, which was the direct cause of Li Ka-shing’s interest.
Li Ka-shing, having earned his success in traditional industries, is not an outsider in the Internet. His investments in Facebook, Siri and Skype in the tech field, and Bitpay, Traity and Osper in internet finance all gave good returns. Although he had so many investments in these fields, never had he successfully got his foot in a real internet business. The only reason was that there is no tech giant in Hong Kong.
Hong Kong is known as a shopping paradise where hundreds of thousands of Mainland Chinese come to consume every year. Thus Hong Kong’s mobile payment will mainly target two groups, Hong Kong residents and Mainland Chinese who travel to Hong Kong. Given these facts, choosing a partner from the Mainland becomes the best option for Li Ka-shing’s step into the mobile Internet market.
The number of active users of WeChat is 900 million while that of Alipay is 500 million. Apart from that Tencent also has the geographical advantage as it is located in the same place as Li Ka-shing's company headquarter; Li's son Li Zecai is also one of Tencent's early investors. But Li Ka-shing still chose Alipay over WeChat, why?
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