How China is Quietly Shaping Asia’s Fintechby Fintech News Hong Kong March 6, 2019
When one considers China’s influence on the rest of Asia, it is often seen as a benchmark; how China’s dramatic move into a cashless society has financially emboldened more of its populace, created more financial inclusivity for the underserved thus inspiring many other Asian nations to strive towards similar cashlessness.
Time and time again, the republic proves its fintech caliber. Despite rising tensions with the USA, China took the lead in global fintech investments in 2018, retaking the same title they held in 2016.
However, China’s influence in Asia extends more than just as a role model. For many fintechs across Asia, China’s companies are their financiers, providing anywhere between cash to business support in growing their platforms.
Some of the more influential companies include:
With the exception of its Hong Kong presence, many of Alibaba’s investments boil down to some form of e-payment, like Paytm, Mynt and TNG Wallet (though this last one is more of a partnership and not to be confused with the similarly named TNG Wallet operating in Hong Kong since 2015).
The e-wallet spheres in both India and the Philippines have become exciting in parts, thanks to Alibaba and Tencent’s battle to dominate India and Southeast Asia. Most of this fighting is done via e-commerce, but fintech is a natural extension.
With that in mind, it is no surprise that Tencent and Alibaba’s entry into India are e-commerce platforms, with fintech offerings. India’s Paytm began as a mobile wallet, but later transformed into an integrated e-commerce store. Most recently, Paytm has embarked on a subscription service-based model, ala Amazon Prime, to entice more users.
Meanwhile, Philippines’ Mynt is more traditionally fintech, offering payments, remittance, loans, business solutions, and platforms.
In Singapore, Alibaba’s initial acquisition of Lazada led them into a merger with HelloPay, Lazada’s online payment platform. HelloPay as a company was later rebranded into Alipay, but the platform’s features and services remain unchanged in the Singapore market.
Alibaba, in investments, has a bigger Hong Kong presence than its contemporaries, with distinct investments. Qupital is a digital trading marketplace for buyers and sellers of corporate receivables. While WeLab is a mobile lending organisation, which analyses unstructured mobile big data within seconds to make credit decisions for individual borrowers.
As for Tencent, it seems like the owners of WeChat are in a more direct competition with Alibaba when it comes to funding. Where Alibaba closed on India’s Paytm in March 2017, Tencent closed on their deal with Flipkart just a month later. Then in July, Flipkart announced their intentions to move more seriously into the fintech sphere, expressing intentions to grow their ‘buy now pay later’ and ‘cardless credit’ products.
In a similar trajectory, Alibaba closed investment into Mynt in February 2017, and later, Tencent closed on Voyager in October 2018. Voyager’s offerings include a prepaid e-wallet, a service that enables enterprises to accept digital payments, remittance, lending and a rewards app.
JD.com’s investment into Go-Jek marks the company’s focus on Indonesian investments at the time. In fact, Go-Jek seems to attract various fintech-related China firms, securing investments from Didi Chuxing, JD.com, and Tencent respectively.
Now, Go-Jek’s Go-Pay is attempting to battle Grab for the Southeast Asian region in both ride-hailing, and in the fintech spheres, both starting with e-wallets but looking to expand into an all-inclusive app ecosystem.
JD.com’s more recent interest in Thailand will cumulate in the eventual launch of the Dolfin wallet, which was just announced January this year. The wallet is a product of Central JD, along with Bangkok Bank and Kasikornbank. Dolfin Wallet plans to stand apart via artificial intelligence and big data learning, both contributions of JD.com’s presence.
Spicing up the scene in India is also Xiaomi with CreditBee, a micro-lending platform similar to Mi Credit announced a few months after investing into KrazyBee in 2016.
In a different area of fintech born out of a similar need, Xiaomi also invested into ZestMoney in India, which allows people to take up small-ticket loans and pay for it in installments with no credit card or credit score. ZestMoney’s offering extends beyond the more typical loans saturating the Indian market; instead more geared towards credit financing, and online shopping.
Meanwhile, back at home, Xiaomi has a stake in Huisuanzhang, which provides services to SMEs including accounting, business registration, business change, tax audit, tax agency, trademark registration, and other professional and efficient integration of tax services.
It seems like Xiaomi’s interest in India stems from the popularity of its mobile phones, which has exponentially increased its market share to topple former champion Samsung in 2018.
Even though Didi Chuxing technically invested into Go-Jek and Grab prior to their fintech pushes, one cannot undercut their influence in both companies’ fintech moves.
Before Uber’s exit/acquisition from Southeast Asia, both it and Grab, under Didi Chuxing, had a similar business model, which Grab won out. We can observe a similar trend between Grab’s new competitor Go-Jek, also Didi Chuxing’s investee. Both GrabPay and Go-Jek diversified into e-paymenets, with an eye on lending and insurtech. Both have also expressed interest in turning their app into a fully fledged e-commerce ecosystem following ride-hailing.
Therefore, Fintech News sees a possibility that if GrabPay and Go-Pay achieves the top two positions in e-wallets, then the one that’s worse off could be devoured by the winning one, ala Grab and Uber in Southeast Asia.