Pony Ma’s Tencent is working with SHK to grow its mobile payments business in Hong Kong
Technology giant Tencent has expanded its network of cooperation agreements with property firms to Hong Kong with the maker of the mainland’s ubiquitous WeChat app last week announcing a partnership with Sun Hung Kai Properties.
Tencent is now working with Hong Kong’s biggest property developer to promote use of its WeChat Pay online payment service into Sun Hung Kai’s 23 malls and YATA Supermarkets as well as on and the company’s SmarTone mobile network across the city.
In a joint announcement the two companies called their new effort the “largest-ever mobile payment activation in Hong Kong,” and said that local residents would soon be able to scan QR codes to pay for their purchases at Sun Hung Kai’s venues in a multi-phase campaign beginning this month.
Old School Developer Gets Ready for the Mall of the Future
“Today’s announcement marks a step change in shopping and spending for all of our customers in Hong Kong,” Sun Hung Kai Properties Executive Director Christopher Kwok said in a statement. “Through this cooperation with Tencent, we are spearheading the mall of the future – a new generation, high-tech mall that puts customer experience at the heart of its offering.”
Tencent’s tie-up with Sun Hung Kai comes after the company set up similar deals this year in the mainland.
The technology giant in January bought a stake in Carrefour and in May teamed with the French retailer to support the launch of its first Le Marche smart supermarket in Shanghai.
In June, Tencent launched another retail initiative when it announced a renewed deal with China’s biggest mall operator, Dalian Wanda Group, to merge e-commerce technologies with over 235 Wanda Plaza shopping centres in the hopes of creating a network of smart malls.
In October, the conglomerate led by China’s third richest man Pony Ma took aim at the region’s budget retail segment with an investment in Guangzhou-based discount chain retailer Miniso.
Tencent Gains a Hong Kong Retail Foothold
In Hong Kong, SHK will set up WeChat Pay terminals in its set of shopping centres including the IFC mall in Central, the APM and MOKO in Kowloon, and up in the New Territories, New Town Plaza, YOHO Mall, Landmark North, and East Point City.
Apart from the malls, customers will also be able to scan and pay via WeChat at 11 YATA supermarkets in the city and make payment on their Smartone accounts via WeChat Pay.
Cross-Border Online Payment System Pushed Forward
Sun Hung Kai’s ifc malls, as well as its other 22 department stores, has already installed WeChat Pay terminals
In addition to the retail partnership, the two companies said that they hope to enable Hong Kong residents travelling north across the border to use the service to make payments at mainland retail outlets in the near future.
The two-way cross-border WeChat payment, which was launched early this month, facilitates renminbi bill payment for Hong Kong residents who don’t have a mainland bank account and is expected to spur adoption of WeChat Pay with Hong Kong residents.
As part of the promotional campaign for the new partnership, the companies said that they would be offering over HK$13 million ($1.67 million) in vouchers and other incentives to WeChat Pay users making purchases at SHK retail outlets and to new users of the online payment system in the city.
Mainland Payment Giants Take Their Battle to Hong Kong
Tencent’s program with SHK comes two years after WeChat Pay was introduced to Hong Kong in 2016, one year after its rival in the world of smart phone payments, Alipay, entered the city. The Alibaba affiliate has already set up cooperation agreements of its own in the city including deals with transportation operator MTR Group and Li Ka-shing’s CK Hutchison Holdings.
Last September, Alipay revealed a deal with CK Hutchison to push out its mobile payment service into the conglomerate’s retailers and supermarkets, including over 300 Parkn Shop grocery stores, around 100 Fortress electronics shops, and 6,000 Watsons personal care outlets.
At the end of last year, Alipay and WeChat Pay both announced partnerships with MTR Group, which allow travellers on the city’s metro network to pay for tickets with the popular mobile payment services. Lo Wu station and Lok Ma Chau stations, the two main gateways between Hong Kong and Shenzhen, are the first two stations providing the mobile payment services.
Hong Kong Plays Catch Up in the Mobile World
According to a report in the official People’s Daily, 40 percent of private spending in Hong Kong is done by cash. Among the 60 percent conducted via digital payments, credit cards account for over 80 percent, while the rest is conducted by services including Octopus, Tap & Go, and Octopus’ O! e Pay.
Unlike mainland China, which conducted over $6 trillion in mobile transactions during the first quarter of this year, Hong Kong’s payment market is still mainly taken up by credit card and other traditional payment methods. Many restaurants, food markets, and other vendors in the city still only accept cash.
While payment options such as the Octopus card are long established in the city, by the end of June Hong Kong had over 1.5 million Alipay users and around 1 million WeChat Pay users.
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