A Scenario Analysis on the Co-opeition Strategy of the Mobile Payment Industry in China
Date Issued
2015
Date
2015
Author(s)
Chiueh, Yu-Jiuan
Abstract
Mobile payment is a way for customers to pay their purchases via mobile devices. Based on the use of different technologies, mobile payment can be further divided into two types: remote payment and proximity payment. In recent years, due to the rapid development of mobile payment , the progress of the related regulations, technologies, and industrial competition changed constantly. All of the players, which include carriers, banks, technology providers, card associations, and internet companies, are eager to formulate an effective strategy to gain competitive advantage and eventually win the game. This study will focus on offline shopping mode of mobile payment and apply scenario analysis to unravel the future uncertainty of industrial development. In China, the incentive of participating in mobile payment competition is the “ Winner takes all” feature of mobile payment platform. The players plan on utilizing the feature to gain customer insight from big trading data, and increase their revenue by doing precision marketing or providing data services. Therefore, the design of secure element is the key point of solution. The competitors expand their business, trying to increase their own bargaining power from other parties. As a result, their business operations overlap from each other, causing the relationship between all players and the industrial competition become much more complicated. The features of mobile payment platform are (1) weak same-sided network effect, (2) strong cross-sided network effect, (3) high transformation cost. Due to these features, there three challenges for the competitors: (1) How to simulate the same-sided network effect between customer and merchant. (2) How to simulate the cross-sided network effect between demand side and supply side. (3) How to maintain the balance of platform ecosystem. Based on the features of mobile payment mentioned before, and the insight from industrial experts, we established three key factors of industrial development, including the progress of mobile payment standard, the demand of mobile payment, and the intensiveness of competition. We utilized these key factors to build 5 scenarios and finished the analysis. In conclusion, based on the scenario analysis, we suggested that the internet companies should develop an all-around strategy to minimize the loss. In order to build a sound market position, they should cooperate with Apple Pay, utilizing the great UX design and security of Apple Pay to upgrade iOS users’ experience; meanwhile, taking the advantage of firm demand side base and innovative ability to create a simpler and safer mobile payment product to Android users.
Subjects
Mobile Payment
Third-party Payment
Platform Strategy
Scenario Analysis
Type
thesis
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ntu-104-R02724038-1.pdf
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