Tencent, Baidu and Wanda form e-commerce JV

News this week: Two of China’s leading Internet companies, Tencent and Baidu, have announced the formation of a new joint venture (JV) with Wanda, a real estate and movie theatre chain group. The JV is valued at about RMB 5 billion (US$814 million), in which Wanda will hold a majority 70% stake, while Tencent and Baidu will each hold 15%.

The JV will aim to gain more market share in China’s e-commerce market, which according to iResearch, online retail sales alone in China is expected to grow 46% to RMB 2.8 trillion (US$447 billion) this year.

The partnership will promote TenPay and Weixin Payment, Tencent’s online payment platforms. These platforms will be the preferred payment method for transactions across all of Wanda’s businesses. Meanwhile, Tencent will have access to movies, TV and online content owned by Wanda.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

Alibaba partners Weibo to launch new payment service

News this week: Alipay, China’s leading e-payment company and an affiliate of the Alibaba Group, has partnered with Chinese microblogging platform, Sina Weibo, to launch a new payment platform called Weibo Payment. The new payment service is accessible through mobile app and website enabling Weibo users to make online and offline payments.

According to Alipay, there are currently more than 400,000 retailers promoting products via their own Weibo accounts. In April 2013, the Alibaba Group paid US$586 million for an 18% stake in Weibo. The company subsequently launched a service allowing Taobao users, Alibaba’s consumer-focused e-commerce arm, to link their accounts with those of Weibo.

A recent report released by the Payment and Clearing Association of China forecast the country’s mobile payment to surpass US$132.2 billion in 2013, a five-fold increase from 2012. Market research firm, iResearch, also reported in November that Alipay accounted for 78% of the China mobile payment market in Q3 of 2013.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

Restructured Alipay to receive financing

News this week: China’s largest e-commerce company, Alibaba Group, has announced the latest restructuring of its payments division, Alipay. Alipay is currently a subsidiary of Zhejiang Alibaba E-Commerce Co. Ltd., a company 80%-owned by Alibaba’s founder and chairman, Jack Ma.

As part of the restructuring, Zhejiang Alibaba will be absorbed and become the Alibaba Small and Micro Financial Services Group. Alibaba will offer 60% of the shares in Alipay’s new parent company to strategic investors, with the remaining 40% to be owned by around 24,000 Alibaba employees. According to Alibaba, founder Jack Ma will retain a 7% stake in the new entity.

Alibaba’s spokesman John Spelich said, “Today’s announcement underscores that employees of both Alibaba Group Holdings and Alibaba Small and Micro Financial Services Group are being incentivised to work hard to achieve success for the company.”

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

Alibaba acquires Chinese asset management company

News this week: The Alibaba Group has acquired a 51% majority share in Tianjin-based Tianhong Asset Management Co for US$193 million in order to expand the range of financial services it offers. According to a Tianhong spokesman, the company’s management will remain unchanged.

Earlier this year in June, Alibaba’s payment platform, Alipay and Tianhong cooperated to launch a new fund and payment platform, Yu’E Bao. Yu’E Bao is an extension of Alipay’s services that allows Alipay’s customers to transfer money from their account into an investment fund. According to Tianhong, the fund attracted more than 2.5 million customers and raised US$1.08 billion in its first 18 days of operation.

Yu’E Bao does not impose a minimum investment amount and allows its users to withdraw their money at any time. Alipay released a statement on its official Sina Weibo microblog saying, “In order to give investors in Yu’E Bao more security, improve innovation and provide more products and services, we have chosen to cooperate with Tianhong Asset Management.”

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

TAITRA partners with local bank to process China payments

News this week: The Taiwan External Trade Development Council (TAITRA) has entered a partnership with Taiwan’s E. Sun Commercial Bank to launch a new direct payment service – E. Sun Trade. The service will work in conjunction with TAITRA’s online trading platform, iDealEZ, to help Taiwanese exporters accept direct payments from mainland Chinese buyers.

According to E. Sun Commercial Bank, the new payment channel will work in cooperation with established mainland China-based payment platforms Alipay and Tenpay. The partnership between TAITRA and E. Sun will also reportedly provide Taiwanese exporters with marketing and logistics services.

TAITRA’s iDealEZ platform was launched in 2011 and has a reported membership of 80,000. In July 2012, the E. Sun bank also opened its first branch on the mainland in Dongguan in the southern province of Guangdong.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

Netsun launches B2B payment platform

News this week: China’s e-commerce service provider, Zhejiang Netsun, announced the launch of its B2B payment platform, SinoPay.com. According to Netsun, the company invested US$16 million in its subsidiary company for the development of SinoPay.com.

Netsun will initially launch SinoPay.com on its own B2B platforms, including B.toocle.com and Smallpin.com. In the second phase of the launch, the company plans to expand its service to other major industry platforms across China. Netsun cited the Chinese government’s 12^th Five-year Plan where e-commerce transaction value is projected to exceed US$2.8 trillion by 2015, of which US$2.4 trillion will be generated from B2B transactions.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

Developing in a striding manner

I should stand in the corner with my hands on my head for making fun of other people's English. With schoolboy French and kindergarten Chinese to my name, who am I to poke fun?

However....as China Economic Net chooses to illustrate their posts with dodgy bikini shots of Jessica Biel (shame on you all for clicking through that link), I'll treat them as fair game. Today's article on e-commerce payment systems tells us that " the third party electronic payment industry in China has been developing in a striding manner". It goes on to tell us that, while 50 or more Chinese companies are engaged in this business, that 80% of the market is controlled by the top three:

1. Alipay.com
2. tenpay.com
3. Chinapay.com

It goes on to note that "In 2007, the trading volume in the third party payment market broke through RMB100 billion yuan, more than doubled year on year and thus continuing to maintain a growth rate over 100 percent for five consecutive years".

There's lots of intereting detail in there and, if that all gets a bit much for you, they also link to the story about how "American supermodel Marisa Miller has knocked actress Lindsay Lohan from the top of men magazine Maxim's list of the 100 hottest women in the world".

Glory be. We wouldn't want to take ourselves too seriously now would we. I was sore tempted to post the picture of Jessica Biel but thought that would be cheaper traffic-generating ruse than writing the word "sex" in the labels. We'll leave that to China Economic Net.

E-commerce JVs abound

Somewhat hidden amid the excitement surrounding Alibaba's Q1 results was an announcement that the company has agreed with Softbank (a major shareholder since the early days) to establish a joint venture in Japan. Details are a bit scarce at this stage, but the reports suggest that ownership will be split 65:35 in Softbank's favour while another piece says that the venture will target Japanese SMEs. It seems this was all rumoured back in November.

Meanwhile, we picked up in Seeking Alpha's weekly tech summary a note about a collaboration between U.S.-based CyberSource Corporation (NASDAQ: CYBS) and China-based PayEase Technology Ltd. The press release is here and CyberSource says "technical and logistical issues pose significant challenges for merchants wanting to enter the China eCommerce market. CyberSource Corporation and PayEase Technology Ltd. are collaborating to remove these barriers and facilitate merchants' entry into the China market".

PayEase CEO Fred Sum (pictured) is quoted as saying "Electronic payment in China is an underserved market with great potential".