Alipay buys China fund manager

The online payment unit of e-commerce company Alibaba Group Holding Ltd has acquired 51 percent of a fund with which it co-launched an Internet-based fund product, in a bid to further consolidate its position in the financial territory.

Zhejiang Alibaba E-Commerce Co, the parent company of online payment company Alipay, will spend 1.18 billion yuan ($190 million) for the purchase of Tianhong Asset Management Co, according to a statement by Inner Mongolia Junzheng Energy & Chemical Industry Co, the fund's shareholder.

Tianhong and Alipay rolled out Yu'ebao in June, a service allowing users to invest money stored online into a money market fund but promises better returns than banks.

Alipay claimed that 2.5 million users had signed up to it and purchased a total of 6.6 billion yuan (over $1 billion) worth of Yuebao in the weeks following the launch.

Market watchers said this marks a critical step in the company's expansion of its financial businesses.