Instead of going directly to e-commerce, Alibaba Group Ltd is trying a subtle strategy to gain presence overseas, particularly in the U.S. by enticing retailers to use Alipay, the International Business Times reported.
Like their U.S. counterparts, Chinese companies similarly find it difficult to establish themselves in the foreign market.
"They have started from the perspective that obviously retailers, particularly in the U.S., want to sell branded products to Chinese consumers," technology analyst Richard Windsor of Radio Free Mobile, noted.
"So they approach retailers like Bloomingdale's or Macy's and say if they support Alipay, they will be able to get customers in China to buy on their website and then send them products into China, no problem," Windsor added.
According to Windsor, if large retailers would support the use of Alipay, the next step is to convince U.S. consumers to use it too. "It's like: 'Hey all these guys you buy from support Alipay.
"Once you have basically got the buyers and the sellers both using Alipay, it's much easier for them to come in with an e-commerce solution that fully supports Alipay. I think that's what their overseas strategy is," the analyst said.
Alibaba is planning to expand and consolidate its logistics in other Asian countries as well as in other regions with emerging middle classes such as India and Africa.
But compared to payment apps in the West, Alipay is way ahead with its add-on services such as wealth services and buying stocks and share using mobile phones.
Tencent and WeChat Pay are also innovators as WeChat combines messaging with online and offline commerce and giving out discount coupons that users can redeem at retailers like McDonald's or share with friends.
According to Windsor, Western firms are learning similar methods from Chinese platforms. "If you look at Facebook, Microsoft, Google, they all have a developer day, and talk about what they are developing on their platform and where they think things are going. What you basically find is that everyone is talking expanding chat to do other things. So everyone is copying what WeChat is doing."
To help Chinese manufacturers find clients overseas, Alibaba, through its Aliexpress, has offered them with logistics and wholesale exports solutions, which was simply aimed at engaging customers with Chinese businesses.
"These are basically network-based businesses to match buyers and sellers. You become the go-to place to buy or sell something; the buyers will pay a premium to buy on your site because they know whatever they want they can get it there", Windsor pointed out.
"You can then charge the sellers a premium to list on it because they know that that is where the buyers are. Once you have got to that stage you can print money like there's no tomorrow," he said.