Published | Dali Finance Written by Zhang Xu

Edited by Wei Li

As a giant in the fintech industry, Alipay has been constantly trying new businesses to cope with the challenges of market competition.

On June 12 this year, Alipay launched a support plan for short video content creators, expecting to invest 1 billion yuan in cash, 10 billion traffic support, and introduce advertising resources worth 100 million yuan by the end of the year to enhance its competitiveness in the short video field.

Alipay's layout in content includes increasing incentive policies, enhancing content product capabilities, and exploring content monetization paths. However, this transformation is not without challenges.

Many participants have doubts about Alipay's content creation, and both users and creators have not yet fully adapted to reading and producing content on Alipay. Currently, most of the short video content on Alipay is "copied" from other platforms, lacking uniqueness, and there are also some issues with the live streaming function, such as the real-time viewership not being displayed, few likes, and few user comments.

Looking at the major players in the industry, WeChat has a huge traffic pool that can naturally attract merchants with content; Douyin is a centralized traffic distribution platform with closedness and strong control over traffic. Alipay faces the pain point of being a tool-type platform, where users leave immediately after use, making it difficult to retain and cultivate traffic. However, its advantage is that it operates essential services, has basic connections with many merchants, is close to money and transactions, and enjoys users' trust.

01

New Business Attempts and Challenges

Although Alipay upgraded its Life Number in early 2022, supporting content forms such as short videos and live streaming, and launched the "Video Channel" in the core position of the App's homepage, users' awareness of being able to browse videos on Alipay is still not high. In addition, when Alipay launched the "Life Circle" function ten years ago, although it strengthened the scene relationship chain and added new functions like rewards and live streaming, it was ultimately not recognized by users because it was considered a copy of "WeChat + Dianping".

Alipay's social experiments have not been smooth sailing. In 2016, Alipay promoted the "Life Circle" to the homepage's "Life Updates," with new content accounting for nearly half of the homepage. However, the "Campus Diary" and "White-collar Diary" circles caused controversy due to some female users posting explicit photos, prompting Alipay to publicly apologize and disband the circles. Since then, Alipay claimed to return to its commercial and financial attributes, but after a few years of silence, it began to experiment with content and social functions again, such as upgrading the Life Number and starting an internal test of the "Interest Community".

Alipay's persistence in social and content mainly stems from user retention anxiety. As a large app, Alipay faces the challenges of short user online time and reduced usage frequency. WeChat Pay has accumulated a large number of users due to its social and content features, and users stay on the platform for a long time. Alipay hopes to increase user stickiness and solve the retention problem by adding social and content functions.

Alipay attempts to attract merchants first, cater to suitable categories, and then explore traffic, which is the opposite approach of WeChat and Douyin. Alipay's goal is to provide merchants with more capabilities, tools, and solutions, rather than becoming a social platform or live e-commerce platform.

Short video traffic is concentrated in the top, and merchant growth has hit a bottleneck. Joining multiple new traffic platforms has the potential to explore opportunities for merchants.

However, there are controversies within the industry regarding Alipay's development of short video business. Some believe that Alipay's user mindset lies in finance, which does not align with the entertainment attributes of short videos. In addition, there are infringement issues with short videos on the Alipay platform, such as clips from dramas like "Our Fighting Years" and "Westward Through the Jade Gate" being posted by multiple accounts. Meanwhile, the comment sections of short videos on the platform are filled with irrelevant comments, and some even directly state "commenting increases income," reflecting the issue of low user activity.

Alipay's path to commercializing traffic is fraught with challenges, and the most obvious defect is how to change users' mindset. Users are accustomed to thinking of Alipay as a transaction and financial management tool and have doubts about its opening short video and social function entry points. Alipay increases user retention time through methods that consume users' energy, such as "watching short videos for 15 seconds to receive cash," but this is not sustainable. How to spontaneously direct traffic is a task that Alipay must face.

Alipay's move is aimed at responding to challenges from competitors such as WeChat, banks, Douyin, Kuaishou, and video numbers. During the Spring Festival in 2023, Alipay attracted users to participate by holding the "Five Blessings Festival" event, allowing users to obtain red envelopes and fortune cards by watching short videos.

02

Alipay's Measures and Dilemmas in Responding to Competition

Internet traffic anxiety has prompted Alipay to evolve into a "big and comprehensive" platform to tap into traffic, and platforms like Meituan and Didi are also facing similar transformations. The gameplay of the "Five Blessings Festival" during the Year of the Dragon has become increasingly cumbersome, affecting user experience. Alipay is aware of the problem internally but believes that any platform needs to go through a process from simplicity to complexity, constantly trying and erroring to find the right path.

尽管如此，支付宝在短视频领域的尝试并非一帆风顺。某MCN机构创始人刘宏对支付宝进军短视频赛道持保留态度，认为这是出于业绩汇报的需要，而非真正的市场需求。商业博主小机虽然接到了多家MCN机构的入驻邀约，但支付宝官方的不作为以及MCN机构的潜在套路，使得这一领域的发展前景并不明朗。支付宝在2023年与NBA中国达成合作，引入NBA视频内容，但体育内容与支付宝的金融属性契合度不高。支付宝此前还尝试过图文内容、直播带货和社交等业务，有的取得了一定的成效，有的则引发了争议。2014年微信支付借助春节发红包的习俗实现了高速增长，给支付宝带来了压力，促使其开始探索业务扩张。

Alipay plans to add a "Interest Community" banner to the "Messages" page at the bottom of the app, setting up multiple interest groups and "Popular Events Nearby" sections to increase user stickiness. However, internet platforms need to keep users on the platform for longer to provide monetization opportunities, and Alipay users have a relatively short duration. Short videos theoretically help increase user duration.

Li Jun, vice president of Ant Group, pointed out that the Alipay platform is comprehensive, and users are not familiar with the product's operation flow, with a utilization rate of less than 10%. They hope to form a closed loop of user behavior through content. However, short videos are not the best choice for Alipay's business model, and the integration of mini-programs and AI assistants may be more in line with its business logic.

03 Alipay's Independent Development and Competitive Barriers

After becoming an independent company separate from Alibaba, Alipay cannot directly access Alibaba's system data and needs to generate its own traffic to cope with competition. However, Taobao's traffic pool is shrinking, and the "WeChat Scan Code Payment" option has appeared on the Taobao payment page, allowing some Taobao orders to directly jump to WeChat Pay for payment. WeChat Pay's services on Taobao are gradually being opened up, currently only for some users and some goods, but it will be fully covered in the future.

Alipay's business model is to connect users and merchants as a trading platform, and improving connection efficiency is its core. However, in terms of content review, Alipay has deficiencies and has failed to effectively deal with infringing content on short video platforms. The improper behavior of MCN agencies has also affected the platform's content quality and user experience.

From content innovation to commercial monetization, Alipay will face more challenges on the path to exploring new growth curves.

Despite facing many challenges, Alipay is still a company with significant competitive barriers and will not be left without a way out. This is a war for payment discourse power and a duel for the future, and Alipay must go all out.

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