Alibaba and Tencent to Provide Financial Services
Published By : 30 Sep 2014 | Published By : QYRESEARCH
The next battleground for archrivals Alibaba Group Holding and Tencent Holdings is the banking sector. As financial affiliates of both the firms have received approvals from the Chinese authorities to enter the banking sector with opening privately owned banks, both the firms are likely to take plunge with head first at this opportunity. As of now, both the companies offer an electronic payment service and some other financial services to its customers.
Alibaba plans to open a bank headquartered in Hangzhou to conduct its Internet banking services. The banking business will take about six months to begin operations as it will need a few permissions from local banking regulations to initiate business. Alibaba also runs a financial services site called Yu’e Bao which now allows investors to transfer money between their Yu’e Bao accounts and personal bank accounts automatically.
Meanwhile, Tencent has been trying to promote its electronic payment system and financial services such as Licaitong, which is an online money-market fund. The company is offering these financial services through WeChat applications used by many smartphones today.
Through entering the field of financial services, both the Internet firms’ will be able to be a part of consumers’ lives in every aspect. However, their growth will largely depend on the Chinese regulators.
However, the market for both Tencent and Alibaba runs in about hundreds of millions of Chinese consumers who are already using their social networking sites and e-commerce services.