Alibaba to expand personal finance offerings

People visit the stand of Alibaba during the 12th China Digital Entertainment Expo, also known as ChinaJoy 2014, in Shanghai, July 31, 2014. [Photo/IC]

E-commerce giant Alibaba Group Holding Ltd is planning to expand the reach of its financial arm Ant Financial Services Group to provide more value-added personal wealth services, officials said.

Ant Financial, which operates electronic payment platform Alipay and online money-market fund Yu'ebao, launched on Tuesday a mobile application Ant Fortune - an independent wealth management platform outside of Alipay. With a single account on this application, the user can manage Yu'ebao, Zhaocaibao, a third-party financial services platform, and other investment funds.

The app has joined hands with Hangzhou Shumi Fund Sales Co Ltd to cover more than 900 funds provided by major fund firms. Investment threshold will be lowered to 1 yuan ($0.15) for Yu'ebao and 100 yuan for Zhaocaibao. The fund can be redeemed a day after the user sells it, two days shorter than the average time needed in other fund firms.

But Ant Fortune will be much more than a simple combination of the already-existing functions. Yuan Leiming, head of Ant Financial's finance department, said Ant Fortune users will be able to invest in the stock market via its Yu'ebao account.

Alibaba has been planning moves in the personal finance sector. Alipay users have noticed that the mobile phone application has started providing real-time live stock market quotations in the first half of this year.

In June, Alibaba said it was buying a 30 percent stake in Shanghai-based media company China Business News for about 2.5 billion yuan to 3 billion yuan, to transform the latter into the Chinese version of Bloomberg. On the recently released Ant Fortune, China Business News, together with Nasdaq Stock Market, will provide select information about the latest performance of the stock markets in the Chinese mainland, Hong Kong and the United States.

Since Ant Fortune has not obtained a brokerage license for the time being, it will not be able to provide a platform for users to invest in the stock market directly. The easier solution will be to introduce some third-party companies with brokerage licenses onto their platform, said Wang Jianhui, general manager of the development department of Capital Securities.

"If Ant Fortune applies for the brokerage license, they might go through all the application process and get one in the end. But this is not in line with their core businesses. Considering the future supervision costs, getting its own brokerage license will not be a wise choice for the company," said Wang.

But Yuan of Ant Financial said that fund products available on Ant Fortune will be a good option when the stock market slumps or fluctuates. It is also high time for Chinese investors, among whom 70 percent have not managed their wealth in any way, to allocate their family wealth to different channels.