So, What's Next For Ant Financial?

Written by Diego Castillo || September 11 2017

Ant Financial is well established as the largest fintech in China. These past two years have been excellent for the company as they reached 450 million users with an average expenditure of 16,000 RMB through the Alipay platform. They recently started to make use of Alibaba’s acquired controlling stake of company Lazada in Singapore, which has given them access to most of the SEA market. In addition, Ant bid for Moneygram in the United States, and funded bike sharing service’s launch in Hong Kong (being the first bike sharing company of the kind launched in HK). However, the important question here is: what awaits the company in the near future? Three words. Diversification, internationalisation and experimentation.

We can see signs of how internationalisation comes into play as the company expands overseas, whether it is in payments, financial services or other ventures. Ant Financial recently sought the partnership of governments and big industry players in countries like Singapore, Indonesia and Malaysia, as well as struck deals with a few retail stores in Western countries.

This process might be taking them time, but surely, they are moving in a direction focused on diversification and internationalisation, and because of the interest the company started in blockchain since last year, we can see that their expansion might come with some experimentation. Although, in the future, they will probably be much more willing to enter international markets using strategic partnerships rather than through experimentation. These partnerships may not allow them to compete directly with alternative payment platforms in foreign markets, but will serve as a toe-hold.

We can see several examples of the strategies that Ant Financial has taken use lately to expand its financial services with its entry to Malaysia and the United States:

In Malaysia, the company started the internationalisation process by starting its operations through the acquisition Alibaba made of most of Lazada, South East Asian online retailer, that had its payments platform later partitioned to Alipay Malaysia, Alipay Indonesia and Alipay Philippines, then through partnerships with banks Maybank and CIMB Bank to enable the Alipay wallet, and more recently, diversifying through partnerships with the convenience stores 7-Eleven and with the Starbucks coffeehouse, to push the use of the wallet with special discounts and promotions.

We can see a similar approach in the US in an on-going process that started January this year when Ant Financial bid to acquire remittance company Moneygram, later struck partnerships with ride-sharing companies GrabTaxi Holdings Pte (Singaporean company that had already entered the US market) and Lyft Inc. to allow people to use their rides through the Didi Chuxing platform and enable payments using Alipay. The company also developed partnerships that could be very important in the future with hotel chain Marriott and with retail chain GNC, which although both are not particularly big in China, they will provide branding and product range, while adding to the number of American businesses that accept payments facilitated by Alipay.

Although, for the moment, the expansion has been primarily aimed at Chinese consumers and travelers, the only piece that is missing is the bank partnership to enable the Alipay wallet to provide full functionality to all consumers, and it is a partnership that will only take time to happen.

In the near future, we will see the continuation of the internationalisation of Ant Financial through partnerships and acquisitions, the diversification of the company, not only in the transport, but also in the food and IT services industries, and the constant experimentation of the company in new business models and ideas.