At the two-year birthday celebrations of Alibaba’s affiliate Ant Financial on Sunday, Eric Jing officially took over the position of CEO from Lucy Peng. Ant Financial was spun off from e-commerce giant Alibaba’s previous financial arm in 2014, signaling Alibaba’s ambition to expand into the financial landscape back then. Alibaba had stripped its financial services before the listing in New York.
Ant Financial, now an affiliated company of Alibaba, has integrated payment, financing, insurance and wealth management businesses, including its third-party payment platform Alipay, online monetary fund Yu’ebao, peer-to-peer (P2P) lending platform Zhaocaibao, and the newly approved private banking business. Ant Financial is funded by domestic investment, with its management and employees holding a 40 percent stake. Alibaba’s founder Jack Ma Yun’s stake in Ant Financial will not surpass the usual 8.9 percent stake he holds in Alibaba (according to sources close to him)
Here are three strategies that Ant Financial may be focusing on in the near future.
1. Targeting and Serving two billion customers globally
Two billion customers is the customer base that the CEO, Jing, envisions Ant Financial serving over the next 10 years. This goal is to be achieved with the help of partners, with whom the technologies and experience of Ant Financial is to be shared. Jing strategy is that, with a global vision and global talent, they’ll reach out into the world in search of partners, and help these partners become the Ant Financial of their own respective locales.
2. Become the CFO for a target of two million micro-sized businesses
Back in 2004, to complete its vision of e-commerce, Alibaba introduced the online payment service provider, Alipay. Now Alipay, for those of you not conversant with the Asian market, is a paypal replica that currently underpins the financial service supporting Alibaba and Ali Express. Alipay is the leading mobile payment platform in China with a market share of nearly 80 percent, according to iResearch. It competes with eBay’s PayPal, Wechat, Baidu Wallet and other local payment services. Apple Pay also competes in this market with Samsung Wallet, albeit with smaller scale subscribers and users.
Alibaba and subsidiaries have have fully relied on using big data since 2010 to help shape and power their strategies. Bringing similar technology to nearly five million small and micro businesses to help with their financing is something revolutionary, and its what Jings feels will help the micro-business segment. “Micro businesses need more than financing. They have needs in financial management, cross-boarder transfers, foreign currency services, and more,” said Jing.
“We will work to become the CFO for two million micro businesses in the next 10 years.” – Jing, CEO
3. Building on the credit system
Alibaba’s big data has incubated a credit system that is applicable to not only Alibaba and Ant Financial, but also to society at large – effectively, it reduces the cost of risk management. They will continue to build upon the system, and open it up to a wide array of applications. Ant Financial recently secured USD 4.5 billion in its Series B financing in April, pushing its valuation up to USD 60 billion.
As part of its plan to expand its overseas businesses, with the aim of providing the infrastructure for global e-commerce companies, , vice president of Ant Financial’s international business. According to Ant Financial, this funding was to help “support Ant Financial in its goal to expand access to financial services in China’s rural areas, while also fueling the company’s globalization.”
In rural China alone, Ant Financial provides payment, insurance and wealth management services to over 140 million users, of whom are limited by way of access to financial services. As of the end of March 2016, MYbank, established by Ant Financial in June 2015, and Ant Micro Loan had collectively provided micro loans to over 20 million small and micro businesses and individual entrepreneurs. Ant financial now boasts of 450million active customers, more than United States and the United Kingdom combined, and yet the company hasn’t even started expanding its services outside of china. As it starts to look outside china, India is a big potential. To go to India it has partnered with Paytm, the country’s largest mobile wallet provider to service Indian customers.