Ant Group: A rising financial services powerhouse

Hangzhou-based Ant Group, a 2010 offshoot of Chinese giant Ali-baba Group Holding, dominates China’s payments market via the Alipay app.

Hangzhou-based Ant Group, a 2010 offshoot of Chinese giant Ali-baba Group Holding, dominates China’s payments market via the Alipay app.

It also runs the giant Yu’ebao money market fund and two of the country’s largest consumer lending platforms. Other businesses include a credit scoring unit and an insurance marketplace.

Alipay, for one, is the world’s largest digital payment platform with 711 million active users, mostly in China, who tap it to buy everything from a quick coffee to even property.

It was created in 2004 as an escrow service for Alibaba to secure transactions on the e-commerce site and generated a whopping US$17 trillion (US$23.1 trillion) in payments in the 12 months through June.

For those who do not have ready cash, Ant operates services that dole out small unsecured loans: Huabei and Jiebei. The former focuses on quick consumer loans for purchases of iPhones and fridges, while the latter finances anything from travel to education. The platforms made loans to about 500 million people in the 12 months through June.

The Yu’ebao money market fund, on the other hand, is one of the largest of its kind in the world with about US$173 billion in assets.

Created in 2013, it allowed people to earn interest from cash they parked in the app, investing as little as one yuan.

Ant started a credit scoring service in 2015 called Zhima Credit. If users opt-in to the service, Ant runs checks for credit worthiness. It charges firms that tap into the service a fee and if customers score high enough, they can avoid paying deposits such as for bike rental.

Last year, Ant entered the insurance market with a healthcare product called Xianghu-bao that allows people to pay a small monthly fee that is pooled to help cover treatment costs for members stricken by diseases such as cancer, Alzheimer’s and even Ebola.

BLOOMBERG