Ten­cent to roll out a credit rat­ing sys­tem

Test­ing po­si­tions com­pany to com­pete with Alibaba’s ‘Sesame’ web op­er­a­tion

China Daily (Hong Kong) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­nadaily.com.cn

Ten­cent Hold­ings Ltd, the so­cial net­work­ing-to-pay­ment con­glom­er­ate, is de­vel­op­ing a credit-scor­ing sys­tem.

This is the com­pany’s lat­est at­tempt to seize mar­ket share from archri­val Alibaba Group Hold­ing Ltd in China’s lu­cra­tive on­line pay­ment sec­tor.

The Shen­zhen-based firm has trial-tested a credit-rat­ing ser­vice among se­lect au­di­ences to seek ad­vice for prod­uct op­ti­miza­tion.

“Pre­vi­ous tests only ap­plied to Ten­cent Credit and QQ’s Su­per Mem­bers,” Ten­cent said in a text re­ply to China Daily on Tues­day.

“Tests have come to an end for now and fur­ther de­vel­op­ment will be an­nounced in due time.”

The com­pany de­clined to re­veal de­tails in­clud­ing its func­tion­al­i­ties, ini­tial re­sponses from users and the timetable for a for­mal launch.

The move will po­si­tion Ten­cent to com­pete with Ant Fi­nan­cial Ser vices Group, a pay­ment af­fil­i­ate of Alibaba, which pi­o­neered a Sesame Credit sys­tem that eval­u­ates and ranks users’ credit rat­ings.

The Sesame ser­vice is em­bed­ded in Ali­pay, Alibaba’s pay­ment tool.

Its 520 mil­lion users are able to ac­cess a wide range of fi­nan­cial of­fer­ings from rent­ing cars with­out de­posits to re­ceiv­ing loans with lower in­ter­est rates, if their credit scores reach a cer­tain bench­mark.

In­di­vid­ual credit rat­ing is an emerg­ing but pop­u­lar con­cept, es­pe­cially among China’s younger and freer­spend­ing gen­er­a­tion who lack credit his­tory. A May re­port by Ant in­di­cates that one in four of those aged 18 to 27 use Ant Check Later, a per­sonal loan and in­stall­ment ser­vice that lever­ages users’ credit scores for risk as­sess­ment.

The move to de­velop credit rat­ings is an­other step by Ten­cent to en­croach on the mar­ket once dom­i­nated by Alibaba.

The duo are en­gaged in a week­long cam­paign that ended on Tues­day to en­cour­age Chinese to adopt their dig­i­tal pay­ment so­lu­tions through lav­ish in­cen­tives in­clud­ing cash re­bates and free bus rides.

Alibaba is ced­ing ground to Ten­cent in China’s 18.8 tril­lion yuan ($2.76 tril­lion) mo­bile pay­ment mar­ket. Its share sub­sided from over 70 per­cent in 2015 to 53.7 per­cent, while that of Ten­cent surged to 39.5 per­cent in the first quar­ter of 2017, ac­cord­ing to con­sul­tancy Analysys.

“They both un­der­stand the im­por­tance of con­trol­ling con­sumer in­for­ma­tion and lever­ag­ing that data for ar­ti­fi­cial in­tel­li­gence ven­tures for de­liv­ery, mar­ket­ing and e-com­merce,” said Shaun Rein, man­ag­ing di­rec­tor of China Mar­ket Re­search Group.

Al­beit be­ing a late mover, Ten­cent’s core com­pe­tence lies in its so­cial ca­pa­bil­ity backed by WeChat’s 938 mil­lion users, said Aaron Guo, se­nior re­search an­a­lyst at con­sul­tancy Min­tel.

They both un­der­stand the im­por­tance of con­trol­ling con­sumer in­for­ma­tion ...” Shaun Rein, man­ag­ing di­rec­tor of China Mar­ket Re­search Group

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