BEIJING Jan 16 China's Tencent Holdings Ltd
quietly rolled out its first financial services
product for its mobile messaging app WeChat on Thursday to
compete against similar offerings from rivals Alibaba Group
Holding Ltd and Baidu Inc.
Tencent teamed up with China's Huaxia Bank Co to
offer the product via its three year-old WeChat messaging app,
which boasts 272 million global monthly active users. The
service was released on a limited basis and is not available to
The product, called Licaitong, is said to be able to provide
interest rates at 16 times more than the central bank's
benchmark one-year deposit rate for money deposited in the fund.
The advertised annualised interest rate on Thursday afternoon
was 6.4350 percent.
China's finance sector has been dominated by state banks for
decades, but technology companies are using their online
expertise and platforms to push financial products developed by
financial management firms.
Tencent, Baidu and Alibaba have pushed to obtain licences to
build financial services platforms, offering web users mutual
funds, loans and insurance. Electronics retailer Suning Commerce
Group Co also got the go-ahead last October for a
subsidiary to handle online mutual fund sales.
Tencent officials acknowledged the release of Licaitong but
declined to provide further comment.
Many of the services are being integrated with the
companies' online and mobile platforms as part of their
online-to-offline strategies. They are encouraging users to use
their platforms to shop, manage finances and book taxis.
Alibaba-affiliated money market fund Yu E Bao, which
translates to "leftover treasure", is a collaboration between
its online-payment affiliate Alipay and Tianhong Asset
The fund has attracted 43 million customers and more than
$30 billion in assets under management as of December since its
launch last June. In October, Alipay bought a controlling stake
Alibaba also has partnered with Tencent and Ping An
Insurance Group to offer online insurance products.
Baidu joined forces with China Asset Management Co when it
launched its Baidu Finance Center in October.
In December, China's central bank said it would closely
monitor the development of Internet financial services to ensure
companies do not cross any legal boundaries in China's highly
regulated financial market.