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Friday, November 21, 2014, 09:22

Alipay brings Black Friday to China

By Lian Zi in San Francisco
Alipay brings Black Friday to China
This photo illustration taken on July 13, 2014 shows the logo of Yuebao, an investment product of Alibaba's online payments platform Alipay, displayed on a smartphone in Shanghai. (Photo / AFP)

A group of high-end retailers in the United States have teamed up with Alipay, the payment service owned by Alibaba Group Holding Ltd, which will enable online shoppers in China to buy goods in the US through Alipay's ePass payment option.

Alipay offers payment and/or escrow services for transactions on Alibaba's marketplaces as well as to third parties. It is China's largest third-party payment service.

Merchants participating in the first Black Friday promotion on Nov 28 this year - the day after the Thanksgiving holiday - include some of the US' biggest retailers such as Saks Fifth Avenue, Neiman Marcus, Bloomingdale's, Macy's, iHerb, Gilt, Ashford, Ann Taylor, American Apparel and Aeropostale.

The ePass payment option will allow Chinese shoppers to buy goods in the yuan.

Alibaba received 278 million orders totaling $9.34 billion during China's own flagship shopping event this year - the Singles' Day on Nov 11, and Alipay, Taobao and Tmall Global have been working flat-out to give Chinese consumers a piece of the action on Black Friday too, said Rebecca Lui, director of marketing and public relations for Alipay US.

Lui said Alipay will work with Borderfree Inc, a market leader in international cross-border e-commerce, and ShopRunner Inc, which cooperates with many retailers to offer free two-day shipping, "to help leading US retailers introduce Black Friday to China and reach out to eager new customers through localized promotions, direct marketing and social media campaigns".

Black Friday is called that because it is considered the day that retailers go "into the black" financially on their balance sheets. It is also the day that unofficially opens the Christmas holiday shopping season.

The US shopping day has also now spread to the United Kingdom, brought across the pond in 2010 by Amazon. Its popularity exploded last year when British supermarket chain Asda Stores Ltd, which is owned by US retail giant Wal-Mart Stores Inc, offered in-store promotions.

In addition to getting a merchandise checkout in Chinese, consumers who use Alipay will be able to access delivery services in China through the China Smart Logistics (Cainiao) Network for participating US merchants.

"When a customer's complete order has arrived at Alipay's distribution center in the US, it will take 10 to 12 business days to get to the customer," said Michael DeSimone, CEO of New York-based Borderfree.

DeSimone said there is no US tax included in an order but there is a fee for shipping and duties. The retailers and Alipay will run a number of promotions geared to Chinese consumers, including "red envelope" (coupon) deals, which have proven successful for Alibaba in China, he said.

Alipay said it would issue a limited number of red envelopes in denominations of 500 yuan ($81) via multiple channels, including eTao and G.Taobao. Shoppers who secure one can then store it in their Alipay accounts.

Alipay also will give shoppers an extra 20 yuan digital red envelope when they share the Black Friday promotion with friends and family via Weibo or other social media channels.

"The holiday-season program connecting Borderfree's global e-commerce platform to the Alipay ePass solution will help drive much greater visibility for participating retailers in China, while providing a more familiar and seamless experience for Chinese consumers who know Alipay as one of the most trusted payment providers in their home market," said DeSimone.

Macy's expressed enthusiasm for reaching out to Chinese online shoppers.

"With a quickly evolving consumer market and a growing base of sophisticated shoppers, China is a key part of our international e-commerce strategy," said Kent Anderson, its president.

"We see this pilot as a compelling way to overcome barriers that have made breaking into this market particularly challenging, and provide consumers with a straightforward, localized shopping experience."

DeSimone said that after the pilot program, Borderfree will look to expand the service to the other 175 brands on its platform and collaborate with the wider Alibaba Group in the future.

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