China's No 1 online payment firm Alipay is expected to top eBay Inc's unit PayPal by transaction value in two years to become the world's leading e-payment service, Alipay's president said on Tuesday.
"I think by 2011 Taobao will reach an annual transaction volume of 1 trillion yuan in two years, topping PayPal and becoming the world’s largest e-payment firm," Polo Shao, president of Alipay, said.
Alipay, a unit of Alibaba Group which owns China's largest e-commerce website Alibaba.com and China’s biggest online retailer Taobao, says it handles more than 1 billion yuan ($146.5 million) in transactions daily. PayPal, which handles $2,000 per second in transactions, is calculated to handle $63.1 billion in transactions this year.
Alipay has more than 180 million users daily whereas PayPal has 75 million active users.
China, home to the world's most populous Internet market, is seeing an e-commerce boom as buyers look to the web for better deals from more reliable suppliers in the country's highly fragmented retail sector.
According to data from research firm Analysy International, Alipay had more than 50 percent of China’s e-payment market in the third quarter, and transaction value was 1.6 billion yuan in the third quarter.
"We expect Alipay to be China’s largest online payment platform in the near future," Wallace Cheung, a Credit Suisse analyst, said in a research note.
Credit Suisse estimates that China's e-commerce industry, mainly based on merchandise, will grow to 1.4 trillion yuan by 2015.
Alipay, which already has merchants overseas using the service, will make a push into southeast Asian markets over the next two years to expand the firm’s footprint.
"I think southeast Asia will be the most suitable to expand into because users' culture, taste in goods and language have a lot of similarities,” Shao said.
Alipay, which declined to give revenue figures, said it was already profitable and generates revenue by charging merchant fees. The firm has no plans to list in the next two or three years and will focus on expanding its business domestically and overseas.
"Alipay will definitely be an international company. It is not the principle of the Internet for an Internet business to just operate in one area," said Shao.
"Expanding abroad is a path we have to walk."
By Li Hui