Alibaba Group Holding's financial affiliate is counting on partners outside China to bring its model of online finance and local services to emerging Asian markets.
Billionaire Jack Ma's Ant Financial is taking initial strides abroad after becoming China's largest provider of internet financial services. On Tuesday, it confirmed an investment in Thailand's Ascend Money, an arm of the agriculture-to-telecoms conglomerate Charoen Pokphand Group. The company is now looking for similar partners to spearhead overseas ventures, including developed countries, said Douglas Feagin, who heads international operations.
Ant Financial will help Ascend build an insurance service, initially targeting motorbike riders. It will also create a business modelled on Alibaba's Koubei, which offers local-area dining reviews and grocery deliveries, he said. Through partners like Ascend and India's Paytm, the Chinese online finance giant hopes to serve two billion users globally within 10 years.
"We want to have local presence in different countries and with different consumers," Feagin said in an interview after a news briefing in Hong Kong. "Our first steps have focused on more developing markets, but over time our strategy will expand to the developed markets as well."
Zhejiang Ant Small & Micro Financial Services Group, as it's formally known, appointed a new chief executive officer last month to oversee its next phase of growth. Eric Jing's elevation came as Ant is said to be preparing for a Hong Kong market debut in 2017. That would cap its evolution from online payments service Alipay into a Chinese internet finance empire that runs the country's largest money market fund and handles Alibaba's e-commerce transactions.
Apart from following its Chinese users overseas, Ant Financial expects to drive more local users to the digital wallets of its partners. Ascend now operates True Money for online payments and Ascend Nano for lending, and has digital wallet licenses in countries including Thailand, Indonesia, the Philippines and Vietnam. In Myanmar and Cambodia, it works through local banks and is applying for an online payments license.
Ant plans to share its cloud computing and cybersecurity technology with Ascend. It also wants to help its partners connect, building a platform where Indian Paytm users can buy goods through Ascend's network in Thailand, and vice versa. That's an overseas initiative it's already rolling out for Alipay's 450 million users when they travel.
"Since we're working together on the technology, we can hopefully build out something over time so they can all connect," said Feagin, a two-decade veteran of Goldman Sachs Group.
Ant's partnership with Ascend will expand over time. While it declined to comment on the size and value of its final investment, Ant had said in June it was planning to purchase a 20 percent stake in the Thai company, with the option to increase to 30 per cent, according to a statement on China's Ministry of Commerce's website.
Ant Financial began as Alipay in 2004, then branched out into financial services by targeting under-served clients. Its Yu'E Bao money market fund had attracted 816 billion yuan ($120 billion) of investment by the end of June, drawing 260 million users in with its easy to use app. Combined with other services from peer-to-peer lending to credit scoring to micro loans, CLSA reckons Ant could be worth $75 billion.
True Money plans to offer its insurance service in as soon as six months, said Punnamas Vichitkulwongsa, chief executive officer of Ascend Group. Ascend Money also wants to create a credit-scoring system akin to Ant's, he said. An investment product like Yu'E Bao could take at least a year to roll out due to the need to gain trust from customers, he added.
Bloomberg
