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Business / Technology

Alibaba Internet finance extends its reach to South Korea

By Ma Si (China Daily) Updated: 2015-12-01 07:49

Ma Tao, a senior analyst at Beijing-based Internet consultancy Analysys International, said co-launching an Internet-only bank is the most cost-efficient way for Alibaba to gauge the potential of overseas markets.

"No offline branch is involved in the partnership. If the plan fails, it will not incur too much of losses. But if it succeeds, it will help Alibaba better understand the South Korean market," Ma said.

Ant Financial already allows Chinese tourists to pay bills with its mobile payment tool Alipay in certain South Korean stores.

"Alibaba's experience in Internet finance and its cutting-edge technology such as big data and cloud platforms can give the e-commerce giant an edge in competing with foreign online banking operators," he said.

But Ma also warns that Alibaba is only one of the 20 investors in K Bank.

"Significant differences exist between offering online financial services itself and launching a joint bank."

Chinese Internet heavyweights are scrambling to offer consumers online financial services like money market funds, consumer credit and small loans.

Internet companies said the data they collect from their users, such as social networking behavior, e-commerce transactions and search results, can help measure the credit worthiness of consumers and enterprises.

Earlier this month, Baidu Inc, the largest Internet search engine in China, co-launched an online bank with China CITIC Bank Corp Ltd. Social networking giant Tencent Holdings Ltd also introduced its Internet bank, the first private online-only bank in China in December last year.

But Alibaba is the first among Chinese Internet players to expand its Internet finance services abroad.

Li Chao, an analyst at iResearch Consulting Group, said Alibaba may promote cooperation between the three Internet banks it supports. "Going global is one of the priorities for Alibaba. Partnerships in cross-border Internet finance will be instrumental to promoting its e-commerce business abroad."

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