Paypal goes after China’s increasingly adventurous shoppers

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While China’s shoppers have no shortage of online shopping options on their doorstep, Paypal wants them to look further afield – and buy from vendors outside the country.

To make this happen, Paypal just announced it has partnered with Baidu, China’s top search engine, so that users of Baidu Wallet can now make payments to Paypal’s 17 million US and international merchants.

Fear of fakes

The move comes as China’s enthusiastic online shoppers – set to spend US$1.2 trillion this year – get more adventurous, looking for unique – or better quality – items from overseas. That’s particularly the case with things like cosmetics, infant milk powder, and handbags. It’s partly fuelled by a backlash against the fake items that plague some online stores and retail outlets.

That’s why an estimated 181 million Chinese people – of over 400 million ecommerce participants in the country – did some cross-border online shopping last year. They’re expected to spend an average of US$473 each on their imported purchases – more than they spend when they shop on local websites.

While it might prove to be a boost for Paypal’s bottom line, the US$70 billion US firm is partnering with an also-ran in China’s tech space: the vast majority of phone payments are done using either Alibaba’s Alipay or Tencent’s WeChat, the multitalented messaging app. Baidu said today that its Wallet service has “over 100 million activated accounts” but did not disclose how many are active. Alipay has 450 million active users.

Both Alibaba and JD, China’s top two online stores, have already made their own moves to sate Chinese shoppers’ desire for goods from overseas. JD has set up a cross-border marketplace for over 1,000 brands, while Alibaba’s Jack Ma is persuading small businesses around the world to sell directly to Chinese consumers – in January promising then-President-elect Donald Trump that his online marketplace will thereby help create 1 million US jobs.

Watch: Ma on globalization