Chinese Millennials Drive Spike In Overseas Alipay Use This May Day

There’s nothing like a holiday to get people spending — and it’s not just Christmas and Hanukkah. In America, holidays like Halloween, Father’s Day and Mother’s Day, Easter and Valentine’s Day can really get the funds flowing. Consumers also drop big dollars on travel and shopping over Memorial and Labor Day weekends, and merchants encourage this by offering discounts at these times.

In China, millions take advantage of May Day — also known as Labor Day, the national workers’ holiday — to head overseas for a few days. Traveling on Labor Day is so popular that the holiday actually had to be shortened from its original weeklong duration to just three days due to the travel rush it created.

This year, with Labor Day falling between April 29 and May 1, Chinese tourists were able to keep spending the way they’re most comfortable spending at home — that is, with the Alipay app, which has become available in more destinations and payment scenarios since this time last year.

Alipay reported processing five times as many in-store transactions overseas this Labor Day compared to Labor Day 2017.

What drove the trend? Perhaps it comes as no surprise that millennials are the top overseas users of Alipay, with those born in the 1980s and 1990s accounting for 85 percent of overseas Alipay usage this Labor Day. But it may be more surprising that nearly two-thirds of those users were female. Alipay did not provide a guess as to the reasons behind this discrepancy.

According to Alipay, the top destinations by transaction volume, both last year and this year, were Hong Kong, Thailand, South Korea, Japan, Macau and Taiwan. This year, Australia climbed in popularity while the U.S. declined. Germany fell off the list entirely, to be replaced by Malaysia — where, notably, merchants began accepting Alipay last May.

However, that doesn’t mean Chinese tourists have lost interest in Western travel. European and North American destinations saw some of the fastest growth in Alipay use over the past year, with growth rates as high as 1,000 percent (yes, with three 0s) in some instances.

Alipay use in Canada increased 16-fold, the company reported, with usage also skyrocketing by 12-fold in the Netherlands and 11-fold in the Czech Republic. Significant growth was also seen in Australia, France, the U.K., Hong Kong and Singapore this year.

It’s not just that consumers can use Alipay in more places. They are also spending more on the platform. The average total spend per user climbed 59 percent from Labor Day 2017 to Labor Day 2018 — from USD $149 last year to USD $237 this year.

Spend in some destinations was much higher. European destinations tended to be the most expensive. In Spain, for instance, average total spend was USD $1,250, with France and Italy not far behind. The U.K., Ireland and Austria also made the top 10 countries for most spend.

Israel, South Korea, the UAE and Japan also ranked among the most expensive destinations.