STORES Magazine - March 2008 - (Page 40)

WORTH WATCHING / INTERNATIONAL SHOPPING East Shops West Payments system opens e-commerce trade route to China BY D. GAIL FLEENOR Alipay and PSP are targeting Chinese Urban Professionals. “Chuppies” are Internet savvy, love American goods and have disposable income. A 2006 survey conducted for UPS by Research International found that Chinese consumers are most attracted to two kinds of U.S. products: books/videos/music and consumer electronics. Young Chinese consumers are more willing to buy various kinds of U.S. products, according to the survey, especially some “new lifestyle” products like coffeemakers. “If China’s 163 million Internet users shop the same way that the Chinese who are vacationing abroad do, then PSP can add lots of value to U.S. merchants,” Philliou says. “The Chinese who travel abroad buy high-quality goods that low-cost Chinese manufacturers aren’t yet capable of producing.” Removes payment barriers In spite of China’s economic expansion, opportunities for U.S. online retailers have been limited by the two countries’ differing payment systems. “The agreement between Alipay and PSP removes these barriers and opens up new potential for merchants to add millions of dollars in new sales volume from an untapped marketplace,” Philliou says. “Alipay addresses current business obstacles such as the high currency conversion rate on international credit cards and the fact that few Chinese Internet users have an international credit card.” PSP is working with select online retailers to integrate Alipay into their payment mix. Outside China, Alipay has partnered with three overseas retailers: Hong Kong-based cosmetics retailer Sa Sa International Holding; StrawberryNet, “the world’s largest provider” of discount skin care, cosmetics and fragrance, also based in Hong Kong; and Japan-based JShoppers, a subsidiary of Nissen Holdings that sells Japanese clothing and accessories. StORES D. Gail Fleenor, a Virginia-based business writer, has 18 years experience in retail and consumer research. WWW.STORES.ORG hina is one of the fastest-growing economies in the world, and foreign retailers have been hard at work establishing a presence there for more than a decade. Now, a relatively new service will make it possible for millions of Chinese consumers to make online purchases from international retailers. C In 2006, more than Alipay, China’s leading indeable to purchase 34 million Chinese pendent third-party online payfrom foreign rement and settlement platform, tailers, Alipay traveled abroad, often is compared with PayPal, was required to spending a total of says Philip J. Philliou, a partner in secure approval $24.32 billion. Philliou Selwanes Partners (PSP), from the Chia New York-based consulting nese governfirm working to promote acceptance of ment. Two large state-owned banks, the the payment service by merchants. Bank of China and China Construction Alipay, he says, has more than a 50 Bank, helped in securing this approval. percent share of China’s online payment Overseas spending by Chinese citizens is market, including 70 percent of the busicapped at $50,000 a year per person. ness derived from Taobao.com, that Similar to PayPal, merchants transmit country’s largest consumer-to-consumer the transaction information directly to online shopping site and second only to Alipay. The online payment system then eBay worldwide. checks the foreign exchange rate from a Alipay has more than 56 million users domestic bank and shows the price of in China and is adding an average of the product to the buyer in Chinese more than 80,000 users per day. AverYuan. The transaction is completed age daily volume exceeds one million when Alipay sends confirmation of paytransactions and $23 million. ment to the merchant, which then ships To enable Chinese online buyers to be the merchandise to the buyer. 40 STORES / MARCH 2008 http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - March 2008

STORES Magazine - March 2008
Contents
Executive Editor's Page
President's Page
Sam’s Club Gets Tough on RFID Stragglers
Athletes for Hire
What Shoppers Think
Goodwill Hunting
10 Things You May Have Missed
Numbers Worth Counting
Full Price/Markdown
Retail People
Luxury’s Shrinking Purse
Workplace Law
Concept2Watch
Payments
First Look
Green Retailing
Cosmetic Sales
Merchandising
E-Commerce
Inventory Tracking
Loeb Retail Letter
ARTS Update
Point of View
NRF News
Retail Industry Calendar
Last Laugh

STORES Magazine - March 2008

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