Ant Group’s Alipay Challenges Dominance of Chinese Banks via Online Sale of Mutual Funds

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An exclusive sale of mutual fund products by Ant Group’s Alipay platform poses a major threat to the prevailing dominance of Chinese banks in the sector.

25 September saw the sale of five hybrid securities investment funds with a combined value of 60 billion yuan and lock-up periods of 18 months, by a raft of leading domestic fund managers including E Fund Management Co., China Asset Management, Penghua Fund Management, China Universal and Zofund.

The funds were offered exclusively via the Alipay platform, racking up a record 10.2 billion yuan in sales within an hour of launch to more than 5.92 million online subscribers.

Analysts say the exclusive offering of the mutual funds via Alipay marks the first time that traditional sales channels have been bypassed in China, and comes as a major challenge to the prevailing dominance of the established banks.

“Ant’s exclusive sales strategy is a massive shock to traditional fund sales channels,” said Gong Tao (龚涛), chair of Zhongjin Huachuang Fund Management Co. (中金华创基金管理公司) to Beijing Business Today.

“Ant’s exclusive sale proves to the market its sales capability, and its careful selection of strategic allocation funds whose profits are more certain is for its future reputation.”

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