Bottom line: Microlender Qudian could raise $500 million or more in an IPO in the first half of next year, most likely in New York, and could get a modestly positive reception as one of the first in a new wave of private Chinese financial firms to list overseas.
Qudian hires CFO, investment bank
Growing signals are emerging that an offshore IPO could be coming soon for Qudian, a financial firm that began its life as a microlender named Qufenqi helping college students to buy things like computers and smartphones. That’s my assessment after learning from one of my sources that Qudian has hired a foreign-trained CFO and also an investment bank, typical developments for a company that wants to make an offshore listing within the next year and often even sooner.
From an investor’s perspective, the company would offer an interesting private play into China’s financial sector, albeit a relatively niche part of that sector. Investors can already buy into numerous Chinese banks and other financial institutions like brokerages and asset managers. But most of those are state-owned and make many of their decisions based on government directives, with the result that their decisions often have a heavy political element that doesn’t always make commercial sense. Read Full Post…
Bottom line: A new global tie-up between UnionPay and PayPal could auger another alliance by the end of the year that would allow the US company to launch a domestic electronic payments service in China by the end of this year.
PayPal in tie-up with UnionPay
In what must certainly be one of the slowest marches to China of all time, US electronic payments giant PayPal (Nasdaq: PYPL) has just formed a tie-up with UnionPay, operator of China’s largest electronic transactions settlement network. On reading the headline I thought that PayPal had finally cracked the market for domestic transactions in China, following more than a decade of trying to enter the lucrative business. But it turns out the new tie-up only covers cross-border transactions and is mostly for UnionPay’s benefit, meaning PayPal is still being locked out of the domestic China market. Read Full Post…
Bottom line: New global initiatives by Alibaba’s cloud and electronic payments affiliates look smart by targeting Chinese customers abroad, but may only stand a 50-50 chance of longer-term success due to fierce global competition.
AliCloud global expansion moves ahead
Following lackluster results for initiatives involving its core e-commerce business outside China, Alibaba (NYSE: BABA) is pushing ahead on the global stage with new moves for 2 of its other areas with big growth potential. One of those has the company unveiling a global strategy for its cloud services unit, AliCloud, which includes a tie-up with former Taiwan smartphone superstar HTC (Taipei: 2498). The other involves Alibaba’s Ant Financial affiliate, which is rolling out its core Alipay electronic payments service in Europe. Read Full Post…
Bottom line: Tencent’s new disclosure that it processes more than 500 million daily mobile financial transactions highlights its rapid growth in the space, pushing market leader Alipay to accelerate its own expansion into Asia.
WeChat wallet creeps up on Alipay
It’s rare to see Internet giant Tencent’s (HKEx: 700) tech-savvy but reclusive chief Pony Ma do interviews or make public appearances, so when he does it’s always reason to take notice. In this case Ma has disclosed new figures that show just how rapidly Tencent is moving into the mobile financial transactions business, rapidly encroaching on an area previously dominated by Alibaba (NYSE: BABA) affiliate Alipay. A separate headline also reflects to some extent the pressure that Alipay is feeling, with reports that its parent Ant Financial is accelerating its recent move into several major Asian markets. Read Full Post…
Bottom line: UnionPay’s move into the dollar-denominated US credit card market looks smart strategically, but is likely to fail due to clumsy execution and fierce competition from Visa and MasterCard.
UnionPay issues first US credit cards
Watch out, Visa (NYSE: V) and MasterCard (NYSE: MA). China’s UnionPay is taking on this global pair of credit card giants on their home turf, with word that the Chinese company will launch its first US-based card in partnership with ICBC (NYSE: 1398; Shanghai: 601398), China’s biggest bank.
Of course I’m being just a bit facetious here, since UnionPay’s first-ever US credit card will have to overcome huge obstacles to ever become a serious rival to local cards from Visa, MasterCard or American Express (NYSE: AXP). But I have to at least commend UnionPay for taking the offensive, since it’s likely to face a major assault on its own home turf later this year when Beijing finally opens the Chinese credit card market to foreigners. Read Full Post…
Bottom line: Vague new tie-ups by UnionPay with Visa and American Express could be followed soon by deals that could finally allow the US financial giants to offer yuan-based credit card services in China using UnionPay’s network.
Visa, UnionPay in new strategic tie-up
Just a week after Apple (Nasdaq: AAPL) launched its Apple Pay service in China, fellow US financial giants Visa (NYSE: V) and American Express (NYSE: AXP) have just announced their own new China tie-ups with the same local partner. That partner, UnionPay, has been eager to announce a growing string of alliances with major foreign financial partners, all of whom are eagerly eyeing its status as monopoly operator of China’s only network for settling domestic financial transactions.
In this case the new separate strategic tie-ups between UnionPay and Visa and UnionPay and AmEx look mostly superficial, since the US giants clearly have far more to offer than their Chinese peer in terms of technology and experience. But Visa and AmEx are probably hoping the tie-ups could serve as a spring-board to accelerate their drive into China, as each eagerly awaits a license to offer domestic payment services in the country. Read Full Post…
The following press releases and news reports about Chinese companies were carried on February 26. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Visa (NYSE: V) Signs MOU with China UnionPay (English article)
Baidu (Nasdaq: BIDU) Announces Q4 and Fiscal Year Results (PRNewswire)
China to Launch Commercial 5G Service in 2020 – MIIT (Chinese article)
NetEase Reports Q4 and Fiscal Year 2015 Financial Results (PRNewswire)
Wal-Mart (NYSE: WMT) to Open 30 China Stores, Upgrade 60, Build up Cross-Border E-Commerce (Chinese article)
Bottom line: A strong reception for Apple Pay from consumers, banks and merchants bodes well for the service, which should attract a major audience among iPhone users but won’t pose a major threat to rival services from Alipay and WeChat.
Apple Pay launches in China
The launch of Apple Pay in China is buzzing through the local headlines a day after the roll-out, in a move that looks certain to shake up a stodgy industry dominated by homegrown names like Alipay. The most revealing headlines report on the rush by everyone, from consumers to banks and merchants to jump onto the Apple Pay bandwagon. That reflects the buzz that any major move by Apple (Nasdaq: AAPL) can create in the world’s largest smartphone market.
Local consumers are undoubtedly pleased that Apple chose China for the Asia launch of Apple Pay, selecting their market over more traditional candidates like Japan and South Korea. China is only the fifth global market for Apple Pay, following launches in the US, Canada, Britain and Australia. The pride element at being first in Asia, combined with Apple’s existing premium image here, will draw a big majority of Chinese iPhone and iPad users to try out Apple Pay on their devices. Read Full Post…
Bottom line: Apple Pay’s upcoming China launch and WeChat’s roll-out of fees for its cash-providing service reflect growing competition in the e-payments market, which will result in a long and costly battle among major players for market share.
Apple, WeChat in new e-payments moves
The rapidly heating China market for electronic payments is in a couple of top headlines today, led by highly anticipated news that Apple (Nasdaq: AAPL) will launch its Apple Pay service in China later this week. At the same time, separate media reports say that Internet giant Tencent (HKEx: 700) is taking a major step towards monetizing the e-payments service attached to its wildly popular WeChat instant messaging service.
The pair of headlines underscore just how much potential both domestic and foreign companies see in the China electronic payments market, which is growing rapidly as consumers and companies do more of their buying online. Some new data nicely summarizes the market, with leading e-payments firm UnionPay reporting that transactions processed over its network soared 30 percent to 312 billion yuan ($48 billion) over the week-long Lunar New Year holiday last week. Read Full Post…
Bottom line: Apple’s and Samsung’s simultaneous new mobile payment tie-ups with UnionPay indicate Beijing will open the market next year to foreign companies, many of whom may choose to partner with not only UnionPay, but also Alibaba or Tencent.
Apple ties with UnionPay
In what should come as a big surprise to no one, Apple(Nasdaq: AAPL) has formally announced a tie-up with Chinese electronic payments giant UnionPay to bring its Apple Pay service to China as soon as early next year. This particular development isn’t hugely unexpected, since Apple CEO Tim Cook had previously talked of such plans and media reported Apple was close to such a deal last month. (previous post)
What does come as a slight surprise is the addition of Samsung’s (Seoul: 005930) name to the latest reports, as the South Korean smartphone giant announced its own separate deal with UnionPay. Apple’s choice of UnionPay also is a slight surprise, since the earlier reports only said that Apple was in talks with several major Chinese banks. Last but not least, this latest announcement seems to be the strongest indicator yet that China will finally open up its electronic payments market to foreign companies in the first half of next year. Read Full Post…
Bottom line: UnionPay’s launch of a new mobile payments service is a long-overdue answer to challenges by Alibaba and Tencent, and is somewhat late but also vital to maintaining its eroding position in China’s electronic payments market.
UnionPay rolls out mobile wallet card
After coming under growing assault over the last 2 years from the private sector, state-run behemoth UnionPay is finally fighting back by launching a mobile-based payment service to counter rival products from Internet giants Alibaba (NYSE: BABA) and Tencent(HKEx: 700). There’s no mention of either of China’s top 2 Internet companies in an announcement of the new service from UnionPay, even though Alibaba’s Alipay Wallet and Tencent’s WeChat Pay are clearly present in the subtext.
UnionPay is just the latest big state-run company to feel the heat of private sector competition, which is shaking up China’s entire financial sector that was previously dominated by big state-run companies. But UnionPay’s case is even more extreme, since the company operated a state-granted monopoly financial transactions settlement network for the first decade of its existence, similar to global systems run by credit card giants MasterCard (NYSE: MA) and Visa (NYSE: V). Read Full Post…
