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BATJ have made rapid progress in Internet finance, backed by agile tech platforms and a high degree of service integration (leveraging their ecosystem to offer scenario-based services). Notably, each one of them differed in their initial roots –
Alibaba and JD.com started off with an e-commerce platform, Tencent expanded its
THE DISRUPTION REPORT JAMNUAYAR2Y0128018 social media messaging platform, while Baidu built on its online advertising
business model as a search engine.
Over the years, these Chinese BigTech firms have established a comprehensive multi-licensed financial ecosystem, including a payments interface, wealth management products, consumer finance, and insurance products, among others.
Figure 29 compares their primary financial services offered.
BATJ INTERNET FINANCE PRODUCT OFFERINGS
Figure 29. BATJ — Internet Finance Product Offerings
Baidu Alibaba Tencent
JD.com
Internet payment
Baidu Wallet Alipay (2004) Tenpay (2005)
Weixin pay (2014)
WeChat / QQ Wallet (2014)
(2014)
JD Payment (2012) JD Wallet (2012)
Internet wealth Baidu Finance management (2013)
Bai Fa (2013)
Yuebao, Taobao Iicai (2013)
Zhaocaibao, Yu'ebao (2014)
Ant Fortune (2015)
Licaitong (2014)
JD XiaoJinKu (2014)
XiaoBai Finance (2014)
Internet insurance Bai An Insurance Zhongan (2013) Zhongan (2013) JD Insurance (2015) (2014)
Online lending
Baidu loan (2013)
E Dairong with CCB (2007)
Ali micro loan (2010)
Jie Bei (2015)
Tenpay microloan (2013)
QQ loan (2015)
JingBaoBei (2013) JingXiaoDai (2013)
Consumer financing
Umoney (2014) Tmall instalment Weilidai (2015) (2014)
Ant check later (2014)
JD BaiTiao (2014)
Crowdfunding Baidu Baizhong iZhongchou (2013, QQ Gongyi (2014) JD Crowdfunding (2014) renamed from (2014)
Taoxinyuan in 2014)
Digital-only Bank
Baixin Bank (2015) MYbank (2015) WeBank (2015)
—
Credit scoring — Sesame Credit Tencent Xinyong Xiaobai Xinyong (2015) (2015) (2015)
Source: Citi Research
Source: Bank of the Future, Citi GPS, March 2018
We believe BATJ enjoys considerable competitive advantages that help position
them favorably when competing with incumbent banks, including (1) a large and
Payments and investments are expected to be the financially most impacted by “disruptive
captive user base; (2) low online acquisition cost; (3) big data customer insights
business models” from BigTech, FinTech, and neo-bank players (the latter can include
(helps product pricing and risk management); and (4) Internet banking licenses.
challenger propositions set up by incumbents as well). Up to one- third to half of all payment volumes may be lost by incumbent banks...
Additionally, Baidu, Alibaba, and Tencent (BAT) have also invested in new online
banks that do not need physical branches and have fewer overheads. It is expected
that the technological advantage of BAT provides them with a unique advantage to
B l e y v e g r e a o g g e r a t e p c h h y n , o t h l o e g mi e o s r s e u d c i h v e a r s s e b i fi g n d a a n t c a i a a l n e d c o c l s o y u s d t e c m o m o p f t u h t i e n g U , . Sw . h a i c n h d c A a s n i a h , e a l p n d t a a i l o l s r o w i d e
vuasreiar teioxnpseriinenpcriecsinagn, dmiamypmroavkeectrheediet natsrsyeosfsdmisernutpptirvoecebduusirneess. s models more likely in these markets and put pressure on banks’ long-term revenue outlook in consumer banking and financial services.
Kathleen Boyle, CFA Managing Editor, Citi GPS Bank of the Future
March 2018
© 2018 Citigroup
“The more diverse financial ecosystem
of the U.S. and Asia ...may make the entry of disruptive business models more likely in these markets.”
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