Alibaba’s Ma expands banking foray with China Minsheng tie-up

Alibaba Group’s founder, Jack Ma, took another stab at shaking up China’s banking industry as the country’s largest e-commerce firm sealed a strategic pact with mid-sized lender China Minsheng Banking to offer financial services.

Hangzhou-based Alibaba, better known for its online platforms that resemble a mix of EBay and Amazon.com, has accelerated its move into China’s financial services sector in recent years to support businesses on its platforms.

Since 2010, Alibaba has been offering micro-loans and money management services with an aim of supplying more financing options to small and medium-sized enterprises that account for the bulk of its B2B platform.

“China’s finance industry, especially the banking industry, only serves 20 per cent of clients. I see the 80 per cent of businesses that have not been served,” Ma said in a People’s Daily article in June. “The financial industry needs someone to shake things up. It needs outsiders to come in and transform it.”

The tie-up with China Minsheng, the country’s seventh-largest listed bank, includes co-operating on wealth management and credit card businesses, direct banking and information technology, the lender said in a securities filing with the Hong Kong stock exchange on Monday.

Alibaba previously signed similar accords with other Chinese lenders including Bank of China and China Construction Bank (CCB). It is not immediately clear if those agreements had expired or are still current.

The deal with China Minsheng comes as Alibaba is preparing for an up to US$15 billion (HK$116.3 billion) initial public offering either this year or the next.

While China’s state-run banking giants are taking note of Ma’s threats, they are not perturbed yet.