Ant Group fintech rival JD Digits restructures amid Beijing’s Big Tech crackdown
- Fintech company JD Digits has been restructured as JD Technology with the addition of JD.com’s artificial intelligence and cloud businesses
- The move comes as Beijing increases its scrutiny of online microcredit after scuttling an IPO for fintech giant Ant Group
JD Digits, the finance arm of JD.com that was known as JD Finance until September 2018, has been restructured as JD Technology as the Chinese e-commerce giant adjusted its business structure and rebranded itself in response to Beijing’s increasing scrutiny of large tech companies’ involvement in finance.
JD.com, a competitor of Alibaba Group Holding in areas such as e-commerce and delivery, said on Monday that it created JD Technology by combining its fintech affiliate JD Digits with its artificial intelligence and cloud businesses. JD previously held a 36.8 per cent stake in JD Digits, according to the fintech firm’s prospectus, but its stake in JD Technology is not yet known. Alibaba is the owner of the South China Morning Post.
Li Yayun, who was the chief compliance officer of JD.com, was named CEO of JD Technology. Li will be responsible for the daily operations of the new venture and reports directly to JD Group founder Richard Liu Qiangdong, according to the company.
The restructure came amid a sweeping regulatory change in China following Beijing’s last-minute suspension of a planned initial public offering by Ant Group, a fintech company spun off from Alibaba. Before restructuring, JD Digits had also applied for an IPO on China’s domestic stock market.
China’s financial regulators published new rules in early November regarding online microcredit, requiring tech firms involved in such business to apply for licenses and hold sufficient reserve funds. The new requirements, which are expected to be implemented soon, will significantly alter the business environment for fintech operations.
Analysts said that the personnel reshuffle and business repositioning at JD Digits offers a glimpse at how Chinese technology giants are scrambling to adapt to a new regulatory environment. According to the latest financial figures released by JD Digits, its consumer credit products, including Baitiao and Jintiao, accounted for over 40 per cent of total revenues.