Only one of five Chinese consumers have a credit card, and the majority of don’t use it to shop online. As a result, Beauty brands must offer unconventional payment options, including government issued invoice system Fapiao and Cash on Delivery.
However, Chinese online shoppers are becoming more comfortable in using domestic online payment systems that have emerged in the past few years. A preference for Cash on Delivery is slowly tapering; our Digital IQ Index: Beauty | China found just 64% of e-commerce sites offer Cash on Delivery vs. 79% in 2013. Fapaio is still common, supported by two-thirds of Beauty e-commerce sites.
Of the new online payment systems, Alipay is the most popular, adopted by 89% of Beauty e-commerce sites. Next are direct online payments direct from banks, facilitated by 82% of brands. Tenpay and 99Bill account for a smaller portion of sales, 29% and 11% respectively.
Where e-commerce sites can improve is connectivity. For example, only 36% of Beauty brands in China provide expedited checkout Alipay Connect.