PayPal, a subsidiary of eBay plans to enter China and India within the next 12 to 18 months. PayPal plans to enter with its new mobile payment applications, which can accept credit card payments through smart phones. This technology is very helpful in expanding small business since it is a cheap and easy way for small business to collect credit card payments. Entering China will be a strategic move for PayPal since Chinese e-commerce exceeds US$ 118 Billion, and is expected to become the largest e-commerce market by 2015. E-commerce in India is also expected to grow at large rates, with the expectation of e-commerce to increase by over 50% this year to $9.2 Billion. This growth is fueled by the increase in the middle class of China and India, which increases the amount of discretionary spending in the region. As middle class consumers become more complex, they are getting access to credit cards, increasing the ease and access to goods.
Source: http://www.2point6billion.com/news/2012/03/19/paypal-here-to-expand-into-china-and-india-10884.html
Source: http://www.2point6billion.com/news/2012/03/19/paypal-here-to-expand-into-china-and-india-10884.html
Bryan Lamb:
ReplyDeleteI think this is a huge move for PayPal. Both the Chinese and Indian middle classes are increasing exponentially and there is a higher demand than ever for different forms of e-commerce. Online purchases are becoming the most popular form of purchasing many different types of items without having to leave the home. As these middle classes increase, PayPal will be able to take the convenience of online purchases to an even easier level and consumers will definitely sign up as it will be the newest and therefore trendiest form of reliable e-commerce. PayPal has set itself up nicely to reap the benefits of both the mobile and computer online consumers in the near future.
I have to agree with Ryan this move to China and India with their growth has the potential for huge profits and growth. I do have some concerns however with how strong the credit agencies are in both China and India. There could be the potential for a lot of fraud that could be difficult to handle due to the governments for both countries.
ReplyDeleteThis should be a great move for the company, barring any interference from the Chinese government. If they suspect payments being used to facilitate things such as protests or to support "blacklisted" people, they will be swift to shut down access to the service. Additionally, it would be interesting to look at how big the peer-to-peer payment market is in China and India. In the US, we value being paid quick and accurately. In China and India, the demand for speed isn't quite there; additionally, as less ego-driven/individualistic societies, peer payments may not be the norm.
ReplyDeleteI agree that this is definetely going to have positive impact in the already increasing e-commerce in India and China, and more so it will help the middle class to keep on growing its consumption since PayPal will enable a more trustworthy system. I also think it would be interesting to see how the company will handle dealing with this two big markets with such a high exponential growth.
ReplyDeleteThis is a gigantic but predictable step for PayPal. I am, however, worried about the increased possibilities of fraud.
ReplyDeleteEven if this is an undeniably big move for Paypal, I wouldn't bet on a success in China. Indeed, the company is not going to be able to rely on eBay to penetrate the market as its local website's (Eachnet) market share, is only 7%. This number has to be compared with the 85% market share of Alibaba's Taobao (the Chinese developed e-commerce platform). Knowing that Alibaba offers its customers a reliable and trusted online payment system (Alipay), Paypal's move in China may turn ugly really fast.
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