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Alibaba payment app Alipay expands into Africa

Luna Jia

Research Analyst

Retail 07.07.2017 / 10:48

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Ant Financial announces that it will to launch Alipay in South Africa.

Ant Financial, the Alibaba affiliate that runs the payment app Alipay, on June 26 announced that it will to launch Alipay in South Africa to serve Chinese tourists as a start.

Rita Liu, head of Alipay EMEA, said that the firm would work with tour bus operator City Sightseeing, facilitated by its partner ACI Worldwide and local company Peach Payments to enable Chinese tourists to purchase more conveniently from City Sightseeing buses.

Alipay has had its eyes on markets further afield than the Middle Kingdom for a while, aggressively acquiring and investing overseas. Alibaba's affiliate Ant Financial, behind the Alipay app, acquired Singapore-based payments platform helloPay in April this year and made a US$1.2 billion bid for US firm MoneyGram that same month.

Alipay launched in Europe in 2016. Liu said that roughly 10,000 merchants in Europe now accept Alipay, and this figure balloons to 120,000 worldwide.

Alipay's rationale behind its first foray into Africa was the large potential market brought by the growing number of outbound Chinese tourists. Liu said that Chinese made about 135 million international trips every year.

Alibaba to Invest Another US$1 billion in Lazada

Alibaba is hiking its stake in prominent Southeast Asian online retailer Lazada to 83% for roughly US$1 billion, according to Lazada Group CEO Maximillian Bittner.

The fresh infusion comes a little more than a year after the Chinese eCommerce behemoth snapped up a controlling 51% stake in Lazada for the same amount of fund, bringing its total investment so far to over US$2 billion.

The takeover strengthens Alibaba’s foothold in Southeast Asia, a fragmented market of over 600 million people where online retail spend could be worth US$88 billion in a decade – growing at an annual rate of 32%.

Founded by German startup factory Rocket Internet, Lazada operates in six countries in the region: its headquarter Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

Alibaba is buying the additional shares at an estimated capitalization of US$3.15 billion for the company, Bittner noted, more than double its pre-money valuation of US$1.5 billion at the time of the first stake purchase. Lazada will continue to operate under the same brand following the investment.

Bittner said Alibaba exercised its option to buy out all Lazada shareholders, except for Temasek and Lazada’s management, which, together, hold the remaining 17 percent of the company. Lazada investors who sold stakes include Rocket, UK-based supermarket operator Tesco, and Swedish investor Kinnevik.

Yonghui Superstores Dishes up New Brands to Satisfy Customers

Yonghui Superstores has proved adept at rolling out new business models to retain market share and combat the challenges thrown up by online rivals.

The traditional retail chain has nearly 500 stores, with another 200 due to be opened later this year, and employs more than 70,000 staff members.

Sales topped about US$7.3 billion, while the company's market cap came in at US$8 billion. But even Yonghui Superstores has been forced to change its approach in the face of fierce online competition.

Known for its massive 5,000-square-meter hypermarkets, the company launched Super Species, a smaller-sized supermarket brand, in its home city of Fuzhou in Fujian province.

The 500-square-meter stores target middle class consumers that like to combine shopping with dining.

Customers choose their favourite foods, such as salmon or prime beef, which are cooked in store. Wine is also available at the store. With a wide range of produce, the company's plan appears to be working.

"Up to 50 Super Species stores are scheduled to be opened this year," said Lin Chuangyan, a partner at Super Species. "The ultimate goal is to introduce the consumers, who come into the store, to our online platform."

Amazon Completes its Acquisition of Middle East eCommerce Firm Souq

Amazon has completed its acquisition of eCommerce firm Souq.com, which was first announced at the end of March and sees the US retail giant enter the Middle Eastern market.

With the partnership, the jewelry group expects to leverage the data resources and the logistics capability of the online seller, as well as the usage of more modern technologies to allure a digital generation.

Amazon paid 580 million US dollars in cash for Souq, according to filings. The two companies said that they have completed an initial integration that allows customers to log into Souq.com using their Amazon account credentials.

Next up, they plan to integrate products and services between the two sites to leverage their respective scale. In an announcement, Souq.com in particular spoke of the potential to integrate with Amazon’s global seller and customer base to boost its business.

Back to the Middle East, the Souq.com deal gives Amazon a firm footing in a growing and competitive e-commerce space. Souq.com itself claims over 45 million visitors per month and a range of 8.4 million products across 31 categories.

 

Source: Kantar Retail

Editor's notes

* This article is based on Kantar Retail China Insight team's weekly newsletter (July 7). If you would like to receive Kantar Retail Newsletter, please send your email address to Bill.Li@kantarretail.com .

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