Popular short video app Douyin has entered China's massive digital payment market with its mobile payment services, looking to tap into the sector which has among others Alibaba Group Holding Ltd's Alipay and Tencent Holdings Ltd's WeChat Pay.
While making a purchase via Douyin, customers can choose to pay via "Douyin Pay", in addition to Alipay and WeChat Pay, the more conventional online payment options offered by third-party payment firms.
The setup of Douyin Pay is to "supplement the existing major payment options, and to ultimately enhance user experience on Douyin", said ByteDance, the company behind Douyin, told China Daily on Wednesday. It said the new function was launched only recently but had gone through several batches of test runs.
Typical payment scenarios in Douyin include tipping livestreaming hosts, purchasing goods endorsed by merchants as well as buying paid-for content.
Douyin Pay allows users to link bank cards from 10 Chinese commercial banks such as Bank of China and China Merchants Bank.
The company said currently Douyin Pay has no QR code available for conducting offline transactions. Alipay and WeChat Pay, for instance, have their respective QR codes, a common form of digital payment through which customers proceed to payment after merchants scan the codes using a special machine.
ByteDance has applied for the "Douyin Pay" trademark, according to corporate information tracker Tianyancha. It acquired a payment license last year.
The company also confirmed that Douyin would partner with China Central Television on the distribution of virtual red packets, which has become a tradition in the Spring Festival Gala in recent years, the most-watched event of the year in China.
China's mobile payment market is expected to surpass 600 trillion yuan ($92.76 trillion) in 2020 and will continue to enjoy high-speed growth, according to a report by Hua Chuang Securities. The brokerage said mobile payments can effectively increase purchase frequency by 23 percent, thus playing a significant part in driving domestic consumption.
"Social distancing due to the COVID-19 pandemic has prompted consumers to spend more time online. As a result, payment services are crucial to reviving business and spurring consumption," said Wang Pengbo, an analyst at consultancy Analysys. "We are seeing short videos, livestreaming, online education gain extra steam in translating traffic into transactions during this period of time."
With 600 million daily active users, Douyin is becoming a fast-rising avenue for brands to draw new users, retain customers and promote products.
The ambition has been exemplified by its latest move to establish a dedicated e-commerce business unit, according to a December report on China's social marketing landscape by data marketing technology firm Miaozhen Systems and the China Advertising Association last month.
The report said the lines of social networking sites, short videos and e-commerce are being increasingly blurred. And through initiatives like developing Douyin Stores, Douyin is looking to build its e-commerce system instead of being a mere marketing channel for other e-tailers.
"As an open platform, Douyin has shown robustness in its commercialization potential," said Maggie Wang, president of Miaozhen Systems' business intelligence and analytics unit. "With proper settings, Douyin is able to form a closed-loop from attracting customers with products to facilitating their purchase via the Douyin app."