Capturing the Chinese smartphone market is the dream of every manufacturer – the population of the country positions it to be one of the dominant sales areas for years to come. Samsung has had a particularly hard time breaking into the Chinese market – in fact, they have dropped out of the top five smartphone brands sold in China. Not only has Samsung lost out to Chinese manufacturers Huawei and Xiaomi, but even Apple beats them in this market. This type of reception does not bode well with the number one smartphone maker in the world, and they aim to do something about the situation.
Samsung launched its mobile payment system, Samsung Pay, in China back in March – about one month after Apple launched their Apple Pay. However, many banks, credit cards or creditors need to be on board for the system to be effective and accepted as a wide-spread option to make mobile payments. For instance, Alibaba Group Holdings, the parent company of Alipay, has 450 million active registered users and simply dominates the commercial markets in China.
Sometimes it is better to ally with your enemy rather than fight them, so Samsung struck a deal with the Alibaba Group to make it easier for owners of Samsung smartphones to make payments on their Alipay accounts. Samsung Pay users will have the option to pay their Alipay accounts without having to access the Alipay application separately. While this is not how Samsung would like to handle Samsung Pay in China, Alipay's dominance would make any newcomers to mobile payments too difficult on their own.
If you go to the Alibaba website, you can see just how large a product line they service – if you live in China that is the place to go for anything from clothing apparel to auto and truck parts. By collaborating with Alipay, Samsung hopes this will attract buyers to a Samsung smartphone. Any edge could make the difference in selecting one brand of a smartphone over another. This partnering was a smart move on Samsung's part, now they will have to sit back and see if this partnership helps with their smartphone sales. Huawei makes a great device and Xiaomi makes a great device even cheaper, and both companies' sales have taken off in the past two or three years, and you must also bear in mind that these are Chinese companies. It will be interesting to see if Samsung can overcome these obstacles and gain ground in China.