At the climax of the 1999 film Fight Club Tyler Durden blows up company buildings storing credit card records. If the film was scripted again today, he would have to destroy many more locations in order to “set everyone free” from their credit records.
That’s because we are now in the era of “big data”. We live at a time when servers storing our information have proliferated, with much of it backed up on ‘clouds’.
The Financial Times describes ‘big data ‘as “a vague term for a massive phenomenon that has rapidly become an obsession with entrepreneurs, scientists, governments and the media”.
As an all-encompassing description for information too large or complex to process using traditional applications, big data also heralds new opportunities for those able to interpret it effectively. Appropriately stored and sifted, the information can turn out to be a treasure trove.
But which Chinese firm has the most valuable database? E-commerce giant Alibaba is one of the more obvious candidates. Controlling reams of transaction records via its online payment system Alipay, the biggest Chinese internet firm by market value already identifies data mining as one of its three ‘pillar businesses’.
Another major contender is UnionPay, which processes payments for 3.5 billion credit and bank cards. (Transactions going through UnionPay – domestically and by Chinese abroad – topped $2.5 trillion in the first half, second only to Visa’s $4.6 trillion.)
In fact, the China Securities Journal describes UnionPay’s credit and debit card information as a “strategic asset” that taps into the financial profiles of almost every Chinese consumer. And its effectiveness in this regard was underlined this month when UnionPay released information collected during the National Day holiday week. During the first week of October, a prime tourism and shopping period, it reported that credit card transactions climbed 23.5% year-on-year to Rmb510 billion ($82.9 billion). And the data from the holiday period also suggests that China’s ‘tourism deficit’ will exceed $100 billion this year, Xinhua says (this ‘deficit’ refers to Chinese spending overseas). UnionPay’s data made evident that more of them were swiping their cards outside China in early October – likely because they knew from previous years that Chinese tourist sites would be massively overcrowded during the week-long public holiday (see WiC168 for more on this problem).
South Korea topped the rankings for overseas destinations, attracting 160,000 Chinese, up 25% from last year. Spending there more than doubled during the October holiday too, according to UnionPay, which can track spending via its payment network covering over 140 countries.
China’s international tourists also spent 50% more during the holiday period on dining, hotels and leisure activities, while spending on shopping rose by 30%.
“The data shows that outbound Chinese consumers are focusing more on what they gain from their travel experiences instead of what they buy at their destination,” an analyst with UnionPay told the China Daily. “This shift shows a heightened awareness of ‘quality time’ during their holidays.”
The Economic Observer notes that UnionPay is a relative latecomer to the commercial potential of the “big data concept” but that it has been collaborating with Intel to understand more about its customers, using the American tech giant’s identity protection technology for its data centres. The newspaper wonders, mind you, whether privacy laws – that prevent companies like UnionPay from trading sensitive consumer information for profit – will make it more difficult to monetise its data trove.
But in the meantime, the release of more generic information still piques public interest. For example, many netizens were intrigued by news that cardholders from Guangdong, Zhejiang, Jiangsu and Henan spent the most during the recent holiday period. The first three provinces in the list came as less of a surprise, but Henan is regarded as one of China’s less affluent provinces. UnionPay has suggested that Henan’s holiday spending rose 50% versus last year, indicative perhaps that Chinese consumerism is spreading beyond the wealthier cities.
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