The topic isn't new: Electronic and mobile commerce (m-commerce) have been cited as business catalysts for nearly a decade. However, the comments attributed to Xi Guohua of the Ministry of Industry and Information Technology of China (MIIT) do at least demonstrate the Chinese government's desire to promote the use of online transaction services. Unfortunately, only 11 percent of the Chinese population have credit cards, and a mere 15 percent of online transactions are made using a credit card, according to the Ecommerce Journal.
This means alternative payment systems are needed for mass market e- and m-commerce. Some already exist, including those from Internet sites such as Alibaba.com Hong Kong Ltd. and Tencent Inc. , as well as independent players like 99Bill Corporation .
And, bubbling away under the surface, are deals that suggest the country's telcos are hoping to play a key role in providing the security and certification systems needed to boost consumer confidence.
For example, this month China Mobile Ltd. (NYSE: CHL) joined forces with Alibaba's Alipay, to provide mobile payment functionality for the mobile operator's online store in Zhejiang province.
At face value, the Alipay deal merely provides another channel for China Mobile's customers to pay for phones, service packages, and value-added services. However, many see it as a trial for wider deployment, both geographically and for 3G-based services. Could this lead to an Alipay-powered apps store, or a model that would work nationally for non-telecom-related products? Read more on the deal at ChinaTechNews
The telcos have scale and an ability to access the Internet that will be dramatically enhanced with 3G. Partnerships between the likes of China Mobile and Alibaba bring these strengths together with a payments mechanism and retail network. That's a powerful combination and one that can deliver the authentication and authorization that Minister Xi highlighted as vital for growth in e-commerce. Who would bet against the combined forces of China Mobile and Alibaba?
— Catherine Haslam, Asia Editor, Light Reading