Alibaba puts on-demand services into mobile wallet app

(Photo by Stavos)

Alibaba’s spin-off finance subsidiary, Ant Financial, today put out a major new update to its Alipay mobile wallet app. For the first time, the mobile wallet now has ecommerce merchants and shopping baked right into the app.

It means that within Alipay, which is China’s top mobile wallet service with over 400 million annual active users, people can now find local services like fresh flowers or food delivery – and then pay for it all in the same app. As in Alibaba’s other marketplaces, all the things are from third-party sellers.

Alipay’s app, updated today to show local merchants offering on-demand services like fresh fruit or flowers.

“Our payment capabilities are the backbone of the app, now we are providing value-added services for both small merchants and retailers and users,” said Fan Zhiming, president of Ant Financial’s payment business unit, in a statement.

O2-oh-snap

This major update is related to last month’s formation of a RMB 6 billion (US$970 million) joint venture company between Alibaba and Ant Financial to focus on web-connected on-demand services, such as food delivery. The joint venture is called Koubei. Alibaba confirmed today that the Koubei on-demand marketplace is what now appears in the “Merchants” tab in the updated (version 9) Alipay app on iOS and Android.

Alipay’s new O2O (online-to-offline) feature is a threat to a new wave of local on-demand startups that have popped up in China in the past couple of years, such as Ele.me for food. While Alibaba is China’s top ecommerce company, it’s weaker in the new O2O areas that are growing fast in the country, like on-demand beauticians, manicurists, cleaners, or car repair mechanics. The big investment in Koubei and today’s mobile wallet update are designed to fix this.