According to a recent eMarketer report, China is poised to become the world's top retail market in 2019, surpassing the US by more than $100 billion.
The eMarketer research indicates that, “ecommerce is a major driver of China's retail economy, with sales growing more than 30% in 2019 to reach $1.989 trillion. That means 35.3% of China's retail sales occur online—by far the highest rate in the world. By the end of this year, China will have 55.8% of all online retail sales globally”.
For IRP Customers, this is an opportunity that cannot be missed.
Alipay on the IRP
Using localised payments, such as Alipay for Chinese and Hong Kong sales, offers a huge advantage to aspirational retailers and distributors wanting to expand into the global market.
However, there are a few things you should know before embarking down this road.
The IRP is built to charge your orders in any currency, if you have the ability to do so with your payment gateway and merchant services.
The problem with Chinese Yuan (CNY), is that the Chinese government and others are concerned about the movement of the currency outside China.
The solution that payment providers use and recommend is that when you charge in Chinese Yuan it will actually reconcile into a US Dollar (USD) account at an amount determined by your payment gateway and/or merchant facilities provider.
The IRP will store the CNY value, and an equivalent point-in-time value in your site's base currency.
This all amounts to the IRP having no visibility on the actual USD amount you will have received for the CNY amount the customer was charged. Also, the IRP must maintain the original CNY amount to be able to process the exact amount to the customer when refunding an order for example.
This leads to two outcomes:
- Alipay customers are charged the exact amount they see in CNY, and you receive an equivalent amount in USD as determined by your providers, with no charges for either party.
- Alipay customers are charged the point-in-time equivalent amount in your site's base currency. You should receive the exact amount for this (confirm with your payment gateway), however the Chinese customer may well be charged by their bank for the foreign currency transaction.
In scenario 1, what you need therefore, to fully take advantage of Alipay in the IRP is:
- A working USD account with your payment gateway, e.g. Realex/Global Payments, Worldpay.
- (Optional) If integrating IRP Orders with a 3rd party system, the ability for this system to accept the CNY value for the Order.
- An ability or process to reconcile the CNY order values with the USD amount in your merchant accounts.
In scenario 2, you should not have to do anything in particular, as the Orders in IRP will appear as if they were placed in your site's base currency, but you may see a reduced impact of Alipay in China and Hong Kong as Chinese customers may elect to not proceed if they do not see a CNY amount, or are wary of paying in a foreign currency.
Seize the opportunity in China
CNN Business reports that China is set to eclipse the United States as the world's top retail market for the first time. We believe that the IRP is the most internationalised ecommerce platform available for the mid market – now is the time for IRP Customers to seize this massive opportunity.
