Analyses & Studies • Sectors & markets • Foresight • Publications
KPMG: The latest on China’s tech giants
Retail consumption remains a key driver of economic growth in China, with an increasing number of consumers turning to their smartphones and apps to purchase goods and services. Digital payments are on the rise, with technology companies and other non-banks disrupting the retail industry by offering secure and easy-to-use e-wallets and payment solutions to their users.
According to data from the People’s Bank of China, the value of mobile payments in China hit RMB 277.4 trillion in 2018, an increase of 36.7 percent from the previous year and more than 12 times the total value recorded in 2014. Meanwhile, the transaction volume of mobile payments in China increased by 61 percent year on year to 60.5 billion in 2018. Data from the first quarter of 2019 indicates that this upward trend is set to continue throughout the year.
In a new article – The rise of the tech giants – KPMG analyses how technology platforms and apps such as Alibaba’s Alipay and Tencent’s WeChat Pay are reshaping the payments landscape in China, and the subsequent impact this is having on banks and consumers. Likewise: whether other viable competitors to Alipay and WeChat Pay could emerge as challengers in the payments space.
To assess potential competitors, the article looks at businesses that have a sizeable and increasing number of users on their apps and platforms. It also looks at the ability of these companies to emulate the approach used by Alibaba and Tencent to seamlessly integrate and immerse their platforms into a number of daily activities, offering a growing number of use cases for their users.
With the proliferation of digital payments in China, both banks and technology companies continue to amass a wealth of data on their customers via their payments platforms and apps. KPMG expects to see increasing competition in this space, with a key focus on the ability of these players to leverage their data for the benefit of their customers.
KPMG believes that the organisations that are able to best leverage their customer data – including through the application of real-time predictive analytics – to provide compelling, personalised and seamless experiences and services for their customers will emerge as the long-term winners in the payments space.
