Piyush Gupta, the Chief Executive Officer of DBS Holdings Ltd., South East Asia’s largest bank by assets, recently stated in an interview with the Wall Street Journal that he considers Chinese e-commerce giant Alibaba Group Holdings Ltd. his biggest competitor.
Alibaba has a large and fast growing financial affiliate called Ant Financial Services Group, which owns and operates Alipay, the largest online payment system in China.
“Alibaba has zero branches, it’s got no infrastructure,” he said. “Despite that today it is doing everything a bank does: it raises money, it does payments.”
Ant Financial is gearing up for a future IPO, which will be one of the most anticipated listings in China when it happens. No timetable has been given, but it is widely expected to list in early 2017. Funds raised will be used to further invest in the financial services business which has ambitious plans and poses a serious threat to more traditional bricks and mortar banks, not just in China but across the Asia Pacific region and beyond.
Alibaba Group Holdings recently agreed to buy a controlling stake in Southeast Asia’s biggest online retailer Lazada Group for about US$1 billion, its biggest overseas acquisition to date, and a sign that the e-commerce giant is expanding beyond its home market to boost growth.
Lazada, headquartered in Singapore, has operations in Malaysia, Indonesia, the Philippines, Thailand and Vietnam. The acquisition would also bring Ant Financial directly to the doorstep of DBS at its headquarters in Singapore.
The rapid development of Ant Financial illustrates the fast pace of innovation in the Chinese social media and e-commerce market. Giant firms like Alibaba, Baidu and Tencent are leading the charge as they each try to outdo the other in terms of features and ease of use in their own apps and web services.
With the Lazada acquisition, Alibaba is extending its reach beyond China into South East Asia and along with it its expertise in social commerce and fintech. More acquisitions are sure to follow.
Author:
David Croasdale
Managing Director
Newell Public Relations