New | China's e-commerce firms and banks fight for market share
Digital players and banks are going head to head on the mainland as they seek to enter each other's business world to woo consumers
The worlds of e-commerce and banking are quickly colliding in China as the two sides race to enter each other's realm.
Several digital players have been encroaching on bank turf of late. Last month, Tencent Holdings' WeBank, China's first online bank, opened for business. In November, Gome Electrical Appliances Holding announced it had taken a 5.7 per cent stake in Huishang Bank Corp to boost its financial services platform. Alibaba Group Holding's private bank is set to launch in the first half of this year.
At the same time, some of the nation's largest financial institutions such as China Construction Bank Corp and Industrial and Commercial Bank of China, through a partnership with Ping An Insurance (Group), have rolled out comprehensive mall-like e-commerce platforms similar to Alibaba's business-to-consumer online marketplace Tmall.
The idea of a banking-e-commerce union has been around for a while. David Zhao, the founder of online fashion retailer Shangpin, was a pioneer. In 2004, he helped launch and operate e-stores of several domestic banks.
Most Chinese consumers expect discounts for goods bought on the internet, a notion that still plagues retailers. Zhao navigated that low social trust as well as authenticity problems by appealing to banks' platinum credit card members. The banks gave shoppers the confidence that they were receiving authentic and quality goods.
"When there was the big boom in flash sales in 2010, since we had all these strategic partners in banks - Construction Bank, Minsheng Bank and Huaxia Bank - we launched as a shopping site for bank clients," said Shangpin's vice-president of global business development Claire Chung.
