Where will Ant Group’s next billion users come from as it ploughs its jumbo IPO proceeds into overseas expansion?
- The online payments giant is targeting emerging markets including Southeast Asia, South Asia, Africa and the Middle East, say people familiar
- Ant’s future expansion plans face obstacles such as rising US-China tensions, protectionist regulations and entrenched local players
Chinese fintech giant Ant Group unveiled a joint venture in Russia last year to build an online payments service with a local e-commerce, social networking and gaming conglomerate. The move prompted Russian banks to revamp the way they connect with younger clients, amid fears they could lose a generation of customers to digital ecosystems.
Bankers worldwide see this as a watershed moment. Ant’s super-slick user experience, cutting-edge technology, as well as the backing of China’s largest e-commerce site Alibaba Group, will accelerate the buildout of digital financial infrastructure with or without the help of others. Alibaba is the owner of the South China Morning Post.
“If you are digitally fast and flexible, then you can partner with ecosystems to supply products via their channels, if you don’t then they will build it themselves,” said Ekaterina Frolovicheva, digital ventures and technologies lead at Russia’s second-largest bank VTB.
Ranged against Ant’s overseas push are US government officials keen to hold on to America’s global technological supremacy, financial regulators eager to prevent citizens’ data and control of financial infrastructure falling into the hands of a foreign company, and entrenched local competitors.
“Ant must be very careful about how they position themselves” as the financial industry is heavily regulated and politically sensitive, said Guoli Chen, a professor of strategy at graduate business school Insead. “It is now an empire.”