Alipay aids China's service industry in going digital

China's leading digital payment platform Alipay on Tuesday unveiled a three-year plan to support the digital transformation of 40 million service providers by working with 5,000 independent software vendors.

Simon Hu, CEO of Alibaba's financial affiliate Ant Financial, made the remarks at the first Alipay Partner Conference held on the same day, noting that Alipay is turning itself into a digital lifestyle platform.

"We want to build the new infrastructure of a digitalized service industry by upgrading Alipay into a digital lifestyle platform," Hu said.

The plan marks a major milestone as Alipay continues to strengthen its positioning in China to provide an open, vibrant digital ecosystem that offers users a gateway into a comprehensive digital lifestyle.

Launched in 2004, Alipay serves 900 million domestic users and provides e-government services in more than 400 cities nationwide.

"The service sector in China is still in the nascent stages of digital transformation, and that means it has huge untapped potential," Hu said, noting that digital technology is helping service providers become more agile and respond effectively to the fast-changing market environment amid the coronavirus outbreak.

Upgrades have been made on Alipay to further improve daily life services, with multiple sections for handy services including doorstep delivery and others related to greengrocers, supermarkets and pharmacies newly added to the platform's homepage.

Alipay also announced that it has rolled out a supportive plan to help merchants undertake digital upgrades, as well as an incentive program that encourages developers of mini-programs.

Many mini-programs have been developed on the platform to fulfill various lifestyle needs of those who are living and working from home and minimize the need for physical contact with service providers.

Meicai, a Beijing-based fresh food logistics startup connecting farmers with catering businesses, was battered recently as downstream restaurants closed due to the epidemic.

With a mini-program launched, fortunately, the grocery startup was able to make its delivery services available to Alipay users and attracted more than 800,000 new customers with orders pouring in from over 80 cities across the country.

"It was not only traffic that Alipay has provided for us, but also a complete set of services such as technical support in developing a mini-program," said Meicai's CEO Liu Chuanjun, adding that it only took seven days for the mini-program to go online.

The digital transformation aided not only small businesses to turn the corner. Xibei, a leading Chinese catering chain brand and one of the first to feel the pinch, received a helping hand from Alibaba's fresh food chain Hema Fresh to cope with staff shortages.

China's service industry contributed 59.4 percent of national economic growth, according to the National Bureau of Statistics.

Despite their importance to the economy, domestic service providers still rely heavily on traditional brick-and-mortar business models and have yet to fully embrace digital technology to boost efficiency and improve customer experience, according to Alipay.

Meanwhile, there has been a rapid surge in consumer demand for digitalized services. In 2019 alone, the number of searches for lifestyle services within the Alipay app increased by 300 percent from that of 2018.

Wu Qingjun, associate professor at the School of Labor and Human Resources of Renmin University of China, said digital economy platforms will become the core driver for the digitalized upgrading of the lifestyle service industry.

"A development model consisting of big platforms and a whole digitalized industrial chain will be formed in the future," Wu noted.