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ByteDance downsizes finance-related business amid Beijing’s curbs on ‘irrational’ capital expansion
- TikTok owner ByteDance plans to sell its securities brokerage business in line with plans to reduce its financial services operations
- The firm’s finance-related ambitions have been stymied by Beijing’s sharpened scrutiny of the country’s financial technology sector
Coco Fengin Beijing
TikTok owner ByteDance, which has been diversifying its business beyond its widely popular short video-sharing app, has decided to downsize its financial services operations amid Beijing’s continued campaign to “prevent the irrational expansion of capital”.
“The company is scaling back its finance-related business and plans to sell the securities brokerage operation,” a ByteDance representative said in a statement on Thursday. The Beijing-based tech unicorn did not name the business unit it intends to divest and provided no data about its financial services business.
ByteDance, which also runs news aggregator Jinri Toutiao and Chinese short video app Douyin, made its foray into financial services with the launch of its “Dolphin Stock” app in 2017. This app “intelligently tracks the market, provides fast information and performance analysis”, according to its website.
In 2018, ByteDance entered the insurance business when it acquired Huaxia Insurance Brokers. Last year, the company won an online microlending license in Shenzhen and obtained an online payment licence with its acquisition of Chinese third-party payment service UIPay.
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How China’s TikTok video app became a global sensation
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Earlier last year, ByteDance bought Hong Kong brokerage Asia-Pacific Securities, renaming it as Stellar Securities, according to a report in January of this year by the now-defunct Apple Daily newspaper. That followed the firm’s application in 2019 to register a trademark called Squirrel Securities, according to Hong Kong’s online intellectual property database.
ByteDance’s financial services-related ambitions, however, have been stymied by Beijing’s sharpened scrutiny of the country’s financial technology market.
The People’s Bank of China, the country’s central bank, said in January that it will strengthen regulation and put all financial activities under government supervision to eliminate risks.
In December last year, the central bank directed Ant Group, whose dual listings in Shanghai and Hong Kong were suspended two months earlier, to immediately rectify financial regulatory violations – including those in its credit, insurance and wealth-management-product businesses – and ensure the protection of its clients’ personal information.
Regulators turn up the heat on China’s fintech platforms
Regulators turn up the heat on China’s fintech platforms
Ant Group is the fintech affiliate of Alibaba Group Holding, which owns the South China Morning Post.
In November 2019, financial regulators ordered the shutdown of China’s peer-to-peer lending platforms that had sprang up nationwide in the past 14 years.
ByteDance’s plans of using its popular content channels, including Douyin and Jinri Toutiao, to promote investment information could also violate Beijing’s latest initiative.
On August 27, the Cyberspace Administration of China, the country’s powerful internet watchdog, published new guidelines to clean up “misinterpretations” of financial and economic policies on the country’s social media.
ByteDance’s efforts to scale down its financial services-related business comes after the company’s own education technology ambitions were dashed by Beijing’s crackdown on the off-campus tutoring market.
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