Fintech sector eyes Asian markets
Domestic fintech companies are increasing their efforts in overseas investment, particularly in Southeast and South Asia, to gain the initiative in these opportunityrich local markets.
Fintech’s overseas expansion is an inevitable trend, but some companies in the sector are investing overseas in a speculative way and these deals won’t succeed, according to Chinese analysts.
Among the Chinese fintech companies looking abroad, the big players started early. For example, Ant Financial, a unit of Alibaba, established a strategic partnership with India’s mobile payment and e-commerce platform Paytm in February 2015.
Ant has formed strategic partnerships with nine overseas companies, most recently with bKash, a Bangladesh-based mobile payment platform, in April, according to a statement Ant Financial sent to the Global Times on Tuesday.
An Ant Financial spokesperson said that these strategic partnerships support the company’s global partners, leveraging Alipay’s experience and technology built up in the Chinese market.
Other fintech players are also seeking market opportunities in neighboring countries. Beijingbased fintech company rong360. com, for example, in February invested in CashCash, an Indonesia-based
financial se platform, rong360.com’s CEO Ye Daqing told the Global Times on Friday. The company has also invested in a fintech company in South America.
“Now we are looking for investment opportunities in South east Asia and South America are also looking for [investment openings in India,” he said.
According to Ye, market similarities between China and many Asian countries make it easier China’s fintech innovations to “copied” in those markets.
“Many Southeast Asian come tries’ fintech markets are China’s market seven or years ago. They also have problems such as informa asymmetry and a lack of mechanisms to fight fraud, which existed [but improved] in Ch China’s experience in those a can meet market demand in t countries,” Ye said.
Ye said that rong360.com only focus on overseas in ment but won’t set up subsi ies in overseas markets. “We to delve deeply into the dom market for another five or 10 years before we focus on over markets,” Ye said.
Xi Junyang, a finance prisor at the Shanghai Universi Finance and Economics, sai was not optimistic about the abilities of short-term success China’s overseas fintech in moments.
“The popularity of a ace financial product, like a the party mobile payment tool, of lies with having a large user base
“Many Southeast Asian countries’ fintech markets are like China’s market seven or eight years ago.” CEO of Rong360.com
Thus, fintech companies need first to accumulate a large customer base in overseas markets or collaborate with a local platform with large customer flows, before they can achieve success with their services. That won’t be easy for them,” he told the Global Times on Tuesday.
For companies that have reached a certain size, short-term returns aren’t the first priority, Xue Hongyan, director of the internet financial center under the Suning Financial Research Center, told the Global Times on Wednesday.
But Xue also noted that many domestic cash loan companies have turned to overseas markets in recent months after facing regulatory hurdles in China.
“I think the intention of their investment is questionable, and they’re bound to get into trouble,” he said.