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What did Alibaba do to Stimulate its Alipay Payment Success Rate?

By ESC Editorial Team, over 6 years ago Business
What did Alibaba do to Stimulate its Alipay Payment Success Rate?

Recently, on a forum held by Legend Capital (In February 2012, Legend Capital took the new Chinese name "君联(Junlian)". Legend Capital is now managing several USD funds and RMB funds with a total AUM RMB35 of billion, and focuses on innovation and growth enterprises with operations in China or related to China.), specifically for CFOs (chief financial officer in a company) and CHOs (chief human resources officer in a company), Chang Yang Alibaba’s vice president of human resources, shared two central methods about Alibaba’s performance management with the Alipay’s successful story in the payment rate.

First of all, the leader should find the right direction for the company, leading the people with a common vision, mission and values. It is the key to keep the people and the company running on the way to the goal. 

Chang Yang has shared his experience of an Alipay project. In 2010, Alibaba Group’s CHO Peng Lei was assigned to be Alipay’s CEO, and Chang Yang be the head of HR. At that time, Alipay emphasised its customers’ security in the payment process by requesting the customers to input many passwords before redirecting them to the bank gateway to finish their payment. This led to many complaints from users.

So Alipay began to focus on improving its payment success rate. The payment success rate looked at the total number of users who paid successfully compared to the number of users who paid with Alipay for the first time. At the beginning, the rate was 50%, i.e. 100 people paid with Alipay for the first time, and only 50 people of them paid successfully. Six months later and through hard work of the team the payment success rate increased by 12%, which was thought to be the maximum improvement possible. However one day, a product called “Quick Pay” was generated. Thanks to an agreement between Alipay and the banks, the customers can now skip the bank gateway to pay directly with Alipay. And the payment success rate was increased to over 90%, giving the customers a better user experience. 

Chang Yang said that Alipay's success was because it took the key points of the business and concentrated on the most important ones. The key indicator in Alipay found at the time was the payment success rate which had to be explored and figured out to reach the key metrics. Finally, the breakthrough point of the product and business model had to be found in order to realise an explosive growth of business.

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