Opinion | Alibaba, Tencent, Ping An JV: insuring failure
A new online insurance joint venture between Alibaba, Tencent and Ping An is almost guaranteed to fail due to poor prospects for online insurance sales.
Alibaba, Tencent, Ping An JV: Insuring Failure
I certainly don't want to imply that companies like Tencent, Alibaba and Ping An shouldn't always be looking for new business opportunities, and this one certainly seems to combine a lot of their strengths. But at the same time, this particular venture looks destined for very lackluster results for reasons that I'll explain shortly.
First let's look at the news, which saw Chinese media having fun with the fact that the new venture would bring together 3 of China's biggest "horses," since Tencent, Alibaba and Ping An are all headed by well-known men surnamed Ma, which means "horse" in Chinese. Industry followers will know that the 3 horses involved are Jack Ma of Alibaba, Pony Ma of Tencent, and Ping An's Ma Mingzhe.
Ma Mingzhe said the new venture, which was still in the process of being set up, would aim to take advantage of Tencent's and Alibaba's big Internet platforms in online games and e-commerce, respectively, to try to sell traditional and innovative new types of policies to their millions of users. He mentioned that the venture could perhaps try to create new types of online game insurance, targeting Tencent users, and insurance against fake goods, presumably targeting the millions of consumers who buy goods on Alibaba's Taobao and TMall platforms.
I should applaud these 3 companies for this new initiative, which certainly looks innovative and would offer products that have probably never been seen anywhere else in the world. The only problem is, there's a reason these products have yet to be seen anywhere else in the world: there's no demand for them.