Tag Archives: alibaba

Alibaba backs $2bn GBA startup fund

Tech giant Alibaba has announced it will be the anchor investor in a HK$2 billion fund to support startups in the Greater Bay Area.

The fund will target new companies in the region that focus on “sustainability, deep tech, health tech, artificial intelligence, automation and digital transformation of traditional manufacturing”, according to a company statement.

More on SCMP

GBA Briefs: 25/9/2019

Scapegoats or scoundrels? SCMP takes a closer look at the political weight of Hong Kong’s property oligarchs and notes that they have been shedding pounds ever since President Xi Jinping came to power. Read more.

No force necessary: An online opinion poll claims that most Hongkongers would rather see the police force disbanded than merely held accountable for recent alleged violent acts. Read more.

Alibaba preps for IPO: Alibaba has bought out a direct one-third stake in its finance subsidiary, Ant Financial, which analysts see as a precursor to its next mega-listing. This IPO would give the battered HK Stock Exchange a major boost. Read more on Caixin.

CICC teams with Tencent: One of the country’s biggest asset managers has established a joint venture with Tencent to run an online wealth-management firm. Talk about a fintech disruption. Read more on Caixin (in Chinese).

AlipayHK expands to mainland

Alibaba’s e-wallet, Alipay, needs no introduction. Together with WeChat Pay, it is the payment app of choice for most mainland residents, who use it both at home and abroad (most retailers we visited recently in Croatia accepts it). AlipayHK, however, has signed up only2 million accounts in Hong Kong. Now the e-commerce giant is counting on its mainland network as a lure for non-committed Hongkongers, as it has been licensed to provide services countrywide. This makes AlipayHK the first Hong Kong dollar-denominated mobile payment app across the mainland and Hong Kong. 

Earlier this year, the AlipayHK wallet extended its services from Hong Kong to the nine mainland cities in the Greater Bay Area, as did its nemesis, Tencent’s WeChat Pay HK. It enabled Hongkongers going to the mainland to avoid the hassle of creating mainland bank accounts, which are required to use the mainland version of the app. However, it’s not as simple as pressing a button, because retailers on the mainland still needed to be persuaded to adopt the AlipayHK payment system. Going nationwide now is expected to further accelerate this process, and the expansion could help AlipayHK boost adoption in the Hong Kong mobile and online payment market, which is currently dominated by the Octopus contactless card. 

The Hong Kong version of Alibaba’s e-wallet is operated by an independent local team under a joint venture between CK Hutchison Holdings, owned by Hong Kong tycoon Li Ka-shing, and Ant Financial. It runs on POS devices connected to Hong Kong banks so that merchants can accept payments from app users. 

AlipayHK said it currently has more than two million users, roughly a quarter of Hong Kong’s 7.5 million residents, and is supported at 50,000 retail outlets. 

The app is not only for mobile payments. AlipayHK also offers insurance, blockchain-based cross-border remittances, and credit collection. The company is also said to be pushing forward a code-scanning payment system for Hong Kong’s MTR, scheduled to be launched next year. 

Cash and the contactless Octopus card remain the payment methods of choice among Hongkongers despite the rising use of mobile payments. According to a 2018 Hong Kong Productivity Council survey, cash is still used by nearly every Hongkonger, and 97% have an Octopus card. Just over half have a credit card. This is the legacy of a tightly controlled financial system that has resisted change in the fintech industry for years – until the HKMA began to allow in new operators and awarded new virtual banking licenses this year. 

The new payment apps are starting to make inroads, as AlipayHK’s numbers suggest. A follow-up survey showed that the use of mobile payments rose to 48% in the second half of 2018, without mentioning the changes to cash and Octopus card use. 

AlipayHK’s two million is still a fraction of the 700 million plus users Alipay has in mainland. 

So, what are the differences between the two versions? 

Interface

AlipayHK has the same basic interface as its mainland version, although the top of the home page has been reduced to two items only: Scan and Pay. Missing are the Collect and Pocket functions, which allows one to receive payment and store electronic cards, coupons or tickets. The middle part of AlipayHK’s interface has various app functions including restaurant coupons, gateway to Alibaba’s ecommerce platform Taobao, credit top-up, etc. 

HK dollar denominated top-up

AlipayHK is Hong Kong-dollar denominated and the user is required to bind it with a Hong Kong bank card. Credits can be topped up through online banking or terminals at local convenience stores. The e-wallet balance can be cashed out although the holder’s identity must have been verified first. Without the verification, a limit on payment amount will be imposed. 

Apps

AlipayHK has provided four services: scan and pay, F&B coupons, digital shopping coupon collection and Taobao. The first three center on scan-and-go transactions, aiming to wean Hongkongers from their attachment to cash and Octopus cards. 

Currently, more than 2,000 well-known brands, including jewelry chain Chow Tai Fook, supermarket chain Parkn’shop, drugstore chain Watsons, cosmetics chain Sasa, and Ocean Park support AlipayHK’s scan and pay function. That number is expected to be expanded to 20,000 by the end of the year. 

AlipayHK has brought in Hong Kong’s popular restaurant review platform OpenRice to provide discounts on F&B and entertainment. AlipayHK is also taking advantage of Hongkongers’ love of collecting paper-based shopping credits, turning them into a digital format: just scan, pay and collect, without having to worry about losing credits. Cashing out credits is also instant, without having to be present. 

Accounting system

AlipayHK account requires identity verification. Users that have not been verified will have limits on payment and are not allowed to cash out. 

Huizhou attracts big e-commerce group

Hong Kong-listed B2B online trading group HC International will move its headquarters and more than 1,000 employees from Beijing to Huizhou’s Daya Bay, it announced. The move is expected to inject nearly RMB76.5 billion per year into the local economy, with a tax contribution of RMB730 million annually. 

Focused on a new technology park projects, HC International (2280.HK) is expecting to lower its cost base while it expands its reach into the country’s third- and fourth-tier cities. The company is of a similar nature to e-commerce giant Alibaba, in that it helps traditional businesses get online. It did RMB10 billion of turnover last year, but its stock has been underperforming as profit margins have been steadily narrowing. 

Read moreabout the move, and hereis a backgrounder on the company by a Hong Kong-based securities house.

HKEx ranks 3rd in global IPOs

The Hong Kong stock market slipped to third place in global initial public offerings in the first half, losing its crown to New York. But analysts expect the imminent Alibaba mega-listing to bring back some excitement, reports Caixin Global. 

Hong Kong Exchanges and Clearing embraced 76 new listing as of June 19, a drop from last year’s 101 offerings at that point. However, funds raised jumped 38% YoY to HK$69.5 billion yuan ($8.9 billion), thanks to some big deals including brokerage firm Shenwan Hongyuan’s $1.16 billion offering in April. It was the highest for the same period since 2015, according to accounting firm Deloitte.

Deloitte expects 200 IPOs to be completed in Hong Kong this year, raising between HK$180 billion and HK$250 billion.The consultancy said trade frictions may drive some U.S.-listed Chinese companies to consider a Hong Kong listing. The expansion of full convertibility, which allows mainland companies listed in Hong Kong to freely convert their nonlisted shares into H-shares, will attract more business, too.

Read more. 

Alibaba’s HK listing ‘a matter of time’

The Hong Kong stock exchange has welcomed a reported US$20-billion secondary listing in the SAR by e-commerce behemoth Alibaba Group in the second half of this year, reports China Daily.

HKEX Chief Executive Charles Li Xiaojia told the HKEX Biotech Week Summit that the flotation, if confirmed, should “come as no surprise and is only a matter of time”.

The reported listing, that could potentially dwarf the initial public offerings of Uber, Lyft and Pinterest combined, would help Alibaba diversify its funding channels and raise liquidity.

Alibaba is said to be aiming to file a listing application in Hong Kong as early as the second half of 2019. The monster share sale of US$20 billion will bring China’s largest company closer to friendlier investors at home as US tensions escalate.

Read more.

Netease Pay gets into export settlement 

Netease Pay, Guangzhou-based internet company Netease’s payment arm, has partnered with US-based Citibank to provide cross-border e-commerce operators with accounts that can collect payments in foreign currencies. China UnionPay and China Netcom will handle the forex conversion, reports Yicai Global.

The service is aimed primarily at Chinese exporters and is a new focus for Netease, which established itself as the country’s leading e-commerce platform for Chinese buying goods internationally. Cross-border financing, tax refunds and other services will likely be added in Q3, after the platform has improved its basic functions, according to a company spokesperson.

Netease’s Koala had a 27.5% market share of total cross-border e-commerce in Q1, according to Guangdong-based iiMedia Research. Alibaba’s Aliexpress service is its prime competitor.

Alibaba put RMB10b into Guangzhou last year

Online behemoth Alibaba put more than RMB10b into Guangzhou last year, investing in no fewer than 44 companies. This is according to Guo Jijun, vice president of Alibaba Group, who was speaking at this week’s 2019 Guangzhou Annual Investment Conference. The Hangzhou-based company paid more than RMB1.1 billion in tax to the city last year, reports the 21st Business Herald.

“Guangzhou has become a very important base for Alibaba,” Guo said. The group has already chosen the city for the headquarters of its mobile internet and industrial internet divisions, and it is the southern base of Alibaba Health. The group plans to further expand in Guangzhou, using the city as a base for its development plans in the region.

Guo said Guangzhou has already shown how important its consumer market is to Alibaba’s current and future growth. During last year’s November 11 “Singles’ Day” shopping festival, the group’s logistics arm, Cainiao, handled more than one billion order packages nationwide, of which about 100 million came from Guangzhou.

Alibaba Cloud has been serving many enterprises in the Guangzhou region, Guo added.  “What we’ve seen is a very pro-active drive of the city,” Guo said. “We believe with the expansion of [this] industrial value chain, the city’s entire economy will benefit.”