Alipay in push to lure mobile users

The company has also launched Yuebao, which was co-developed by Alipay and Tianhong Asset Management Co Ltd, an online money-market fund that promises higher returns than similar products. About 16 million users invested 130 billion yuan by October, making it the country's largest public fund, said Fan Zhiming, president of Alibaba's small and micro financial services unit.

The company's mobile push has already started to pay dividends, as is evident from the soaring growth of mobile e-commerce transactions during the Nov 11 online shopping festival. About 21 percent of the total number of transactions recorded during the 24-hour period was completed through mobile devices, up from just 5 percent last year.

However, it's an "open secret" in the industry that Alibaba has essentially missed an earlier target of 8.8 billion yuan for mobile transactions, said Zheng Liang, director of the e-commerce division at research firm Nielsen in China.

Alibaba is struggling to translate the success it had with users of desktop PCs to the mobile arena, with active access points significantly lagging behind Tencent's WeChat, Zheng said.

The WeChat app added payment functions in September and it enables smooth transactions by linking users directly with banks without the need for an intermediary such as Alipay.

"The mobile phone payment service on WeChat marks a key step on Tencent's path to develop e-commerce services. And it provides a momentum that is reshaping the whole industry, making us believe that future payments will happen on mobile devices in a different way," said Yi Fanghan, an independent Internet industry analyst and blogger.

Meanwhile, observers pointed out that some users said that they might stop using Alipay after the new fees are introduced.

"My mother always puts money on a regular basis in my Alipay account because it's convenient and it costs nothing. I'm not sure she will continue to do so after the service starts charging fees, especially since she doesn't know how to use a smartphone," said Guan Xin, a student in Shanghai who is originally from Shandong province.

Alipay still dominates the Chinese Internet payment market. According to a report released by consultancy Analysys International, Alipay had a 46.3 percent share of the online payment market in the first quarter of 2013, followed by Tencent's Tenpay, which had 20.3 percent.

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