Haier Plans to Sell Third Party Payments Subsidiary to China Commodities City for 450M Yuan

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Chinese home appliance giant Haier plans to sell its licensed third party payments subsidiary to Zhejiang China Commodities City (浙江中国小商品城集团股份有限公司) (CCC).

CCC recently announced that it plans to purchase 100% of equity in Zhejiang Haier Internet Technology Co., Ltd. (浙江海尔网络科技有限公司) from Haier Group.

According to the announcement CCC plans to pay a consideration of 449.3 million yuan for Haier Internet, converting it into a fully invested subsidiary.

The move will give CCC a much coveted third party payments license, given that one of Haier Internet’s key assets is licensed payments subsidiary KJT Pay (快捷通支付), which engages in online payments operations.

KJT Pay first obtained a license to engage in online payments in July 2013, which it subsequently extended in July 2018 to 5 July 2023.

According to analysts the proposed consideration of 449.3 million yuan is reasonable, given that CCC will obtain both a third party payments license and related online payments infrastructure that will prove essential for its efforts to create an online digital services system.

“For many companies that want to expand online operations, a payments license is a strategic resource, as online payments can thread together the company’s cash and information flows,” said Huang Dazhi (黄大智), a researcher with Suning Financial, to Securities Daily.

The move will also enable Haier to grab a fresh infusion of cash and divest itself of a loss-making enterprise. In 2020 Haier Internet posted operating revenues of 89.9035 million yuan, and net losses of 14.2054 million yuan.

The market value of third party payments licenses in China has plunged in recent years, from around 3 billion yuan during the heady days of Alipay and WeChat Pay’s initial growth phase, to around 500 million yuan at present.

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