Apple has teamed up with mobile payment company Alipay to offer Chinese consumers interest-free financing on iPhones. The move could help revive Apple’s slowing sales in the country.
The offer allows shoppers in China to pay for an iPhone in installments over 24 months. They can avoid interest payments on loans used to purchase Apple products that cost over 4,000 yuan ($595).
Alipay, which is owned by Ant Financial, is the payment platform of choice for hundreds of millions of Chinese shoppers. The financing is made through Alipay’s lending service, Huabei, which translates to “just spend.”
The same terms are available through credit cards issued by three Chinese banks, according to Apple’s website. The offers run through March 25.
When combined with additional discounts for customers who are trading in an older phone, the offer means that shoppers can get their hands on Apple’s iPhone XR for just 183 yuan ($27.25) a month.
Apple has previously offered one-year financing on iPhones through Alibaba’s online marketplace Tmall.
The new financing deal through Alipay could help Apple get back on track in China.
Apple (AAPL) issued a rare sales warning in January, saying that a much sharper than expected economic slowdown in China had damaged iPhone sales in the final three months of 2018.
The tech giant later confirmed that global revenue from iPhone sales dropped 15% over the previous year during the crucial quarter, sparking worries about the future of the crucial product line.
The strength of Alipay
Roughly 870 million people around the world used Alipay and associated joint ventures during the 2018 fiscal year, according to Alibaba (BABA), which is an affiliate of Ant Financial.
The vast majority of Alipay users are in China, where everything from laptops to street food is bought using mobile payment apps. Ant Financial also has a money market fund app and a credit scoring business.
Tencent (TCEHY) operates a rival payment service, called WeChat Pay.
China’s smartphone market
Some Chinese smartphone makers are faring better than Apple in their home market.
Huawei sold 30 million phones in China in the last three months of 2018, nearly three times as many as Apple, according to research firms Canalys and IDC.
Consumers love Huawei’s high-end phones because they have great cameras and cost less than the latest iPhones. And by offering a selection of cheaper phones, Huawei is able to target a bigger market.
Two other Chinese rivals, Oppo and Vivo, are nipping at Huawei’s heels, but their sales grew by less than 10% in the fourth quarter of last year.
Sherisse Pham and Serenitie Wang contributed reporting