Yu'ebao, launched in mid-June is Alibaba's wildly popular online-finance platform that works through Alipay, Alibaba's third-party-payment arm, to deposit idle Alipay funds into a comparatively high-yielding money market fund.
Given Yu'ebao's current annual interest rate of 4.5 percent, its lack of a minimum deposit requirement, and the ability to transfer and withdraw funds easily without paying a commission,it has made them China's biggest online investment service.
The online platform that works through Alibaba's online finance arm Alipay (a Chinese version of Paypal) and partners with Tianjin-based Tianhong Asset Management Co. Ltd., had attracted 1 million users. A month after it was unveiled, in mid-July, it had 4 million users and more than 10 billion yuan ($1.6 billion) in deposits.
Yu'ebao's popularity has skyrocketed in large part, because of consumer confidence in its parent company, Alibaba, and its link to the company's online payment platform, Alipay, which claims close to 600 million active worldwide users (800 million registered accounts according to the company's website).
In announcing Alibaba's intention for Yu'ebao and Alibaba's foray into financial services to Chinese media, the company's founder and chairman, Jack Ma, said, "China's financial industry, especially the banking industry, only serves 20 percent of clients, and I see there are 80 percent of the clients (who) are not covered. Financial services should be about serving the layman, rather than playing inside your own circles and making money for yourself."
Hangzhou-based Alibaba, which runs Taobao, Tmall, and a host of other e-commerce sites, accounted for 70 percent of package deliveries in China last year, with sales reaching $163 billion, or 2 percent of China's GDP, according to statements released by Yahoo. The American tech giant currently owns a 24-percent stake in Alibaba.
In preparations for a possible public listing in the months to come, some financial analysts have estimated Alibaba's worth at more than $100 billion, rivaling Facebook's $104 billion valuation last year before its $16 billion IPO—the largest ever for a tech company, and the third largest of all time.
Analysts are able to justify the sky-high valuation because of the explosive growth in China's online retail sector. McKinsey's estimates the Chinese online retail economy, with Alibaba's operations as a core engine, will reach $420 billion to $650 billion by 2020, eclipsing the United States to become the world's largest market. China is currently the second largest market in the world, with online retail sales reaching $210 billion in 2012, and an annual growth rate of 120 percent since 2003.
Source: Beijing Review
In announcing Alibaba's intention for Yu'ebao and Alibaba's foray into financial services to Chinese media, the company's founder and chairman, Jack Ma, said, "China's financial industry, especially the banking industry, only serves 20 percent of clients, and I see there are 80 percent of the clients (who) are not covered. Financial services should be about serving the layman, rather than playing inside your own circles and making money for yourself."
Hangzhou-based Alibaba, which runs Taobao, Tmall, and a host of other e-commerce sites, accounted for 70 percent of package deliveries in China last year, with sales reaching $163 billion, or 2 percent of China's GDP, according to statements released by Yahoo. The American tech giant currently owns a 24-percent stake in Alibaba.
In preparations for a possible public listing in the months to come, some financial analysts have estimated Alibaba's worth at more than $100 billion, rivaling Facebook's $104 billion valuation last year before its $16 billion IPO—the largest ever for a tech company, and the third largest of all time.
Analysts are able to justify the sky-high valuation because of the explosive growth in China's online retail sector. McKinsey's estimates the Chinese online retail economy, with Alibaba's operations as a core engine, will reach $420 billion to $650 billion by 2020, eclipsing the United States to become the world's largest market. China is currently the second largest market in the world, with online retail sales reaching $210 billion in 2012, and an annual growth rate of 120 percent since 2003.
Source: Beijing Review
