Eyeing Tokyo Olympics travel boom, Alipay seeks to deepen foothold in Japan

Ant Financial, the financial arm of China's e-commerce giant Alibaba Group, is seeking closer ties with Japanese financial institutions and merchants to make its mobile payment service Alipay fully available across Japan by 2020, when the Tokyo Olympic Games is anticipated to attract a large number of Chinese sports fans and tourists.

The move marks a renewed effort by Ant Financial to strengthen Alipay's foothold in Japan, where it has established cooperation with local partners such as Kyoto Shinkin Bank and LINE Pay over the recent two months. Alipay allows mobile phone users to complete payments by simply scanning quick response codes, and is now used by Ant Financial to fulfill its dream of creating cash-free societies across the globe.

For Japan, a market Alipay has found difficult to penetrate due to local consumers' preference for cash payment and acceptance of UnionPay card, Alipay is aiming to target Chinese tourists visiting the city when Tokyo hosts the Olympic Games.

The Tokyo Olympic Games and the increasing number of Chinese tourists visiting Japan will provide a golden opportunity that Alipay could grasp to connect Chinese tourists with local merchants in Japan, said Eric Jing, executive chairman and chief executive officer of Ant Financial.

In the recent years, Japan has become more attractive to Chinese tourists, with more than 7 million Chinese visiting the island country in 2017, up 15 percent from a year earlier, according to statistics from the Japan National Tourism Organization.

The Chinese craze for Japan tours has reignited Alipay's desire to conquer the Japanese market, where it has not been well accepted by local people since it was initially connected with airports, scenic spots and department stores there in 2015.

In July and August, each Chinese visitor consumed an average of 3,900 yuan in Japan through Alipay, representing an increase of 52 percent from the same period of last year, showed statistics from Ant Financial.

In 2017, Chinese tourists spent 1.6 trillion yen in Japan, said the country's Ministry of Land, Infrastructure, Transport and Tourism.

At the same time, Japan has offered an olive branch to Chinese citizens with a favorable visa policy, which prioritizes Chinese tourists.

According to Japanese media, the Japanese government is planning to introduce an online system to process tourist visa applications in 2020 ahead of the Tokyo Olympic Games, which will be first applied to Chinese tour groups. Japan aims to attract 40 million visitors by 2020.

In the race to explore the overseas markets, Alipay has a tough competitor, WeChat Pay, another Chinese mobile payment tool developed by Internet giant Tencent. Domestically, Alipay is going neck to neck with WeChat Pay.

Tencent has changed its old strategy of designing local versions of WeChat Pay for foreign users and has shifted focus to the popular travel destinations like the United States that are attractive to Chinese tourists. The strategic shift is prompted by a boom in outbound tourism and aimed at Chinese outbound travelers.

In July, Tencent announced plans to connect more American merchants with WeChat Pay in a two-step approach. The first step is that some American merchants including duty-free stores, famous restaurants and transportation service providers which are well recognized among Chinese tourists will be selected for cooperation, followed by the second step focusing on establishing partnerships with bigger local merchants which are popular with Chinese tourists.

China remained the world's biggest source of outbound tourists in 2017, with the number of outbound trips growing by 7 percent year-on-year to 130 million, shows the 2017 China Outbound Tourism Travel Report jointly released by the China Tourism Academy and Ctrip, a leading travel service provider in China.

Chinese outbound tourists spent $115 billion in 2017, up 5 percent from a year earlier, according to the report.