China's online payment sector enters new growth boom

The e-commerce sector in China entered a new period of growth in Q2 with substantial gains in online shopping and B2B e-commerce gross merchant volume (GMV), a study from iResearch has revealed.

The growth in the segment has resulted in a surge in third-party online payment GMV, the study shows.

 In addition, air ticket booking, online gaming and other traditional sectors maintained stable growth.

The fast growing fund purchase market, mainly monetary funds, also drove up third-party online payment GMV which arrived at 2.81 trillion Yuan in Q2, rising by 15.7% QoQ.

According to iResarch, China third-party mobile payment GMV amounted to 2.3 trillion yuan in Q2 2015, rising by 66.0% YoY and 14.7% QoQ. The growth gradually stabilized after a boom for several quarters.

iResearch ascribes the growth to four factors. First, the explosive growth of WeChat red envelope users expanded the user base and enhanced user stickiness. Second, the gradually mature business models of apps also fueled the extraordinary growth of mobile payment sector.

Third, diversified offline payment scenarios was also an impetus. Fourth, mobile payment had cultivated  a certain number of sticky users by Q2 and there were even long-tail users in some scenarios such as WeChat red envelope and some offline payment scenarios.

Online shopping captured 25.0% of online payments in Q2 2015, followed in turn by fund purchase at 21.5%, air ticket booking at 10.9%, payment for telecom fees at 3.9%, B2B e-commerce at 6.0% and online gaming at 2.3%.

According to iResearch, e-commerce entered a new period of growth in Q2 2015, as the GMV grew much faster than the previous quarter.

E-commerce operators also launched mid-year sales promotion as usual and introduced branded and imported commodities this year which hence pushed up the GMV. In addition, e-commerce operators’ efforts in brand image building also boosted the growth of market GMV.

However, the YoY growth of total value of China’s imports and exports dropped by 6.9% in the first half of 2015, which somewhat impacted SME e-commerce GMV, and hence resulted in a slight decline in B2B e-commerce GMV. Along with continued growth of internet finance, internet giants all ramped up efforts in this sector and cultivated internet users’ habit of using online investment services, which contributed to constant growth of fund purchase GMV.

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