Way to pay
New Zealand is in the dark ages compared with China’s electronic payment methods and we need to upgrade if we want more of that country’s business.
New Zealand is in the dark ages compared with China’s electronic payment methods and we need to upgrade if we want more of that country’s business.
Avisit to China’s big cities reveals that shoppers in the nominally communist land are streets ahead of their Western counterparts when it comes to paying for things. New Zealand banks still proudly promote PayWave as the ultimate PIN-less payment method, but a few weeks in Shanghai digging out my debit card to pay for a lemon tea and a steamed bun felt as archaic as having to sign a receipt would back home.
In every outlet, from the flagship designer stores on Huaihai Rd to the corner shops selling bottled water and dirt-cheap cigarettes, customers were queuing to pay with their phones. Mobile payments have taken hold in China over the past couple of years, with Alibaba’s Alipay and Tencent-backed WeChat Pay the dominant providers. Credit cards, by contrast, are used for just 12% of online transactions.
WeChat Pay is an add-on to WeChat, the Chinese equivalent of Facebook Messenger, suggesting some integration is still to come for Kiwis’ everyday digital technologies.
About US$3 trillion was funnelled through WeChat and Alipay last year, a twentyfold increase over four years, according to a report released in April by the United Nations-funded Better Than Cash Alliance.
Part of the attraction for merchants is the low barrier to entry. Individuals have an auto-refreshing QR code on their phone that a store can scan to take payments, or shoppers can scan the store’s own QR code displayed next to the cash register. Any store with a printer can sign up to QR payments,
with merchants paying on average 0.6% to process the transactions, and anyone with a smartphone can use the pay apps for free.
I found myself increasingly envious of the ease with which other shoppers paid for their purchases and wished I had a Chinese bank account so I could join the fun. Admittedly, my frustration was exacerbated by the constant need to get cash from an ATM and a wallet full of change, but the apps looked even smoother than paying by card, especially when most people seemed to constantly have their phones out and eyes glued to the screen.
USE YOUR NOODLE
QR codes aren’t just useful when paying for your noodles, though. For New Zealand companies hoping to cash in on the growing appetite of China’s middle class for imported goods, WeChat is a channel they can’t afford to ignore. The link with consumers goes beyond simple advertising and straight to a key issue for Chinese consumers: trust.
One thing that becomes clear when talking to Shanghai locals, whether Chinese or expats who’ve made the city their home, is how concerned they are about where their food comes from. Although country-oforigin labelling requirements have become a hot topic in New Zealand, in China the concerns are as much about whether you can trust what it says on the label. Products from multinational food brands such as Coca-Cola are as ripe for counterfeiting as Louis Vuitton handbags.
Kiwifruit marketer Zespri has discovered that first hand. Chinese kiwifruit sellers use fake Zespri stickers, their own name with the company’s large Z logo, or inaccurate references to the fruit being sourced from New Zealand in attempts to mislead consumers. Local authorities are looking to prosecute some fake-label producers, but in Wulumuqi Rd in the middle of Shanghai’s leafy French Concession, green boxes of “Zhouzhi” kiwifruit, with the Z writ large, were common at the ubiquitous street-side fruit shops.
QR codes provide a way around that. Zespri is working on allowing consumers to scan a barcode that would give them access to information about where their fruit was grown and packed. Loren Zhao, the founder of e-commerce platform FruitDay, which started off selling fruit but has grown to sell all kinds of perishable food, says Chinese consumers are willing to pay a premium for food they trust, and this technology is essential to providing it.
Zhao’s platform, which Alibaba’s biggest e-commerce competitor, JD.com, will use to expand its delivery network, has been selling Zespri fruit since its inception eight years ago. One thing the kiwifruit marketer has done right in promoting its brand in China is working hard to connect directly with its customers, he says.
“We want to connect the provider, Zespri, and the customer – not just provide fruit. We want the customer to understand more about the fruit, the background and where it comes from,” Zhao says. “Companies have the database, but in the past they couldn’t let the customers use that. We’re not just selling the real products; we’re also trying to teach our customers how to separate the real and the fake ones.”
FONTERRA ON BOARD
Dairy brands, wary of another food safety scandal in China, are on board. Fonterra uses QR codes on its Anmum-branded infant formula in China, which when scanned give consumers verification of authenticity, packing dates and locations. Similarly, state-owned enterprise AsureQuality has developed the inSight label to go with its QR codes on Yashily-branded infant formula and Theland Milk sold in China.
With food fraud estimated to cost the global industry up to US$40 billion a year, it’s an investment worth making for the sake of brand protection.
FruitDay’s Zhao says online food sales have surged over the past five years, as customers are increasingly willing to trust online platforms for their grocery shopping and QR codes have provided the traceability vital for reassuring people about the provenance of their goods.
With even the beggars who walk the carriages of Shanghai’s metro trains making use of QR codes, it’s unsurprising that food multinationals are doing their best to hook into China’s burgeoning population.
Fonterra recently launched QR codes on cans of formula sold domestically. Although that may be aimed more at Chinese expats than locals, it could be a step towards the day when it’s as outmoded for Kiwis to pay by debit card as it is with a cheque.
Chinese consumers are willing to pay a premium for food they trust.