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With an actual population of over 1.4 billion and an internet population of 649 million internet users by the end of 2014, with 557 million accessing the internet on their smartphones, it is no mystery why many tech companies are looking to establish a footprint in China. Uber has announced a new partnership with Alipay. The ride hailing service announced that its China users will now be able to pay for their rides using Alipay when they are travelling outside of mainland China to other regions. According to the company, during China’s week-long ‘National Day’ holiday in 2015, Uber users from mainland China took Uber rides in 255 cities across 58 countries and regions.
“We’re delighted to partner with Alipay, and to work with them to bring the convenience of their payment platform to our users internationally” Eric Alexander, Head of Business for Uber Asia, said “We are increasingly seeing very strong demand from mainland Chinese riders using Uber in other markets internationally, and this partnership enables us to provide these travellers with a more convenient, hassle-free payment solution.”
The service will be launched in partnership with Ant Financial Services Group. It will launch first in Hong Kong, Macau and Taiwan, to take advantage of their popularity with Chinese business and leisure travelers and there after will be extended to more regions around the world during the year.
This move exploits Uber’s partnership with Alipay, which has been in play since 2014, allowing Uber users in mainland China to pay for their rides using Alipay. The users were however forced to connect a dual-currency credit card with their account when travelling outside of their region and were charged in US dollars. With the new partnership, users will now be able to pay with Alipay, a far more seamless process.
This is not by any means a novel move on Uber’s part. The company introduces and re-invents its payment and business models to make them unique to each region it is operating in. Take the rickshaw services in India or the cashless payment options in Kenya and recently introduced in Nigeria as examples. Currently Uber is available in 37 cities in China and plans to expand to 55 more by the end of February.
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Looking at the numbers, the partneship appears to have the potential of success for both Uber and Alipay. In China, Alipay has over 400 million active registered users and 200 financial institution partners. The number of riders are not looking bad for Uber either. Uber cites a research by the independent brokerage and investment group CLSA, in which it claimed that in 2015 tourists from mainland China made 125 million outbound trips and this will grow to over 200 million trips by 2020.