Alipay to help western ecommerce vendors reach Chinese consumers, without the shady middlemen

The Chinese internet and the international internet don’t mingle too often, but in the ecommerce industry, some barriers are slowly dropping. Yesterday evening Alipay, the third-party payment service spun out of Alibaba, announced it will introduce ePass, a payments and logistics-service service specifically for western ecommerce sites looking to sell goods to Chinese consumers.

According to Alizila, ecommerce firms that sign up for ePass will be eligible to process transactions through Alipay. They’ll also receive access to tracking information from China Smart Logistics Network, which Alibaba owns a 48 percent stake in, and Alimama, an ad network that runs across Alibaba’s ecommerce properties like Taobao and Tmall.

In the past, Alibaba has extended its hand towards western retailers primarily by encouraging them to set up shop on Tmall, the company’s flagship business-to-consumer ecommerce site. High-profile US brands including Apple, Burberry, and CostCo have hung their shingle on Tmall with in the past year in hopes of luring in more Chinese consumers. But operating Tmall shops require some hands-on hassle, however, in the form of translation and site management. ePay will allow overseas ecommerce vendors sit pretty, while Chinese with solid English peruse their sites and purchase goods using Alipay, the same way they would on a domestic shopping site. The convenience, of course, will come with a fee.

There’s another upside to ePay for western ecommerce sites – it will help them cut out grey market middlemen. According to data from Bain cited by the Business of Fashion, 60 percent of Chinese consumers have purchased luxury goods through daigou, a term used to describe grey market resellers. While these daigou, many of whom operate on Taobao, maintain healthy businesses by helping end-buyers avoid import taxes, they also fill a void. Without a proper channel to purchase that nice handbag on H&M’s international website, credit card-less Chinese have no choice but to resort to the grey market. ePass, as a result, helps western retailers reach Chinese consumers directly.

Editing by Steven Millward