Alibaba Ambitions in Fintech

Bits don’t stop at borders. Bits also don’t stop at category boundaries. Retailers and banks both serve consumers and process payments. For most of the 20th century retailers and banks were partners. In the 21st century digital age, both have to get used to the more complex cooptition reality. Bankers have long worried about WallMart moving into banking. So far that has not happened. Nor has Amazon decided to eat the bank’s lunch, yet.

However Alibaba is not holding back. Their ambition level is staggering. We used to talk about the 4 horsemen of the Internet – Google, Amazon, Apple and Facebook. Alibaba has to join their ranks if you look at any metric such as revenue, profit, or market capitalization. So one horse has to get the boot or we have to drop the 4 horsemen label.

Forget the Amazon of China label for Alibaba. The label of “Amazon plus eBay plus PayPal of China” alone does not recognize their global ambitions.
Alibaba is a fierce competitor. Obviously they have the scale, the balance sheet and the ambition. There is a complacent view in Silicon Valley that “yes, but, they lack innovation”. In Fintech, Alibaba sure looks innovative enough and they have the clout to pull it off.

Alibaba kept Alipay outside their IPO; that probably made it easier to avoid an excess of regulatory scrutiny. However make no mistake that this is one company controlled by a hugely determined entrepreneur.

A few weeks ago I first noticed Alibaba moving into money market funds.

It looks like Jack Ma is not satisfied with the biggest tech IPO in America. Tick in the box on that score. Now he seems to also want the biggest IPO in China. The newly branded Ant Financial combines 6 entities into one:

  1. Alipay (think PayPal)
  2. Alipay Wallet (190 million active users)
  3. Ue’e Bao (the money market fund)
  4. Zhao Cai Bao (lending marketplace)
  5. Ant Credit (microfinance)
  6. MY Bank (full stack bank)

It looks like Ant Financial will do an IPO in China, which makes sense, because they won’t be offering financial services in the West, yet. However I am sure that the “four original horsemen” will be watching these moves carefully. Methinks this could trigger some mega M&A deals; the i-bankers are probably salivating. PayPal is clearly in play. Which means eBay is also in play. Amazon, Google, Facebook and Apple all have the balance sheet and ambition to buy both PayPal and eBay.

Ant Financial will probably follow a First The Rest, then the West strategy. They will win first in emerging markets and then they will go for America and Europe. Given the huge potential of the unbanked this makes sense. Also low cost finance is a great enabler for cross border razor thin margin e-commerce, so having both e-commerce and Fintech controlled by one entity make sense as well.


  1. […] Over the past few years observers in Silicon Valley and the West at large have found Alibaba’s innovation and success confounding and astounding, and not in that order. In January of last year we took note of Alibaba’s huge ambitions. Back in those days, people were still trying to describe Alibaba by analogy; at first the Amazon of China, then “the Amazon plus eBay plus PayPal of China.”. The point is the so-called Four Horsemen of Fintech, that is Amazon, Google, Facebook and Apple, have solid competition in Ant, and, it is sheer foolishness to dismiss them as lacking innovation, as pundits once quipped. […]

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