Alipay buys fund manager to boost online services

The online payment affiliate of dominant mainland e-commerce company Alibaba is taking control of Tianhong Asset Management to accelerate its push into online financial services.

Tianhong shareholder Inner Mongolia Junzheng Energy & Chemical Industry yesterday said the investment of 1.18 billion yuan (HK$1.5 billion) gives Zhejiang Alibaba E-Commerce, the parent company of online payment company Alipay, 51 per cent of Tianhong.

Alipay and Tianhong launched a new fund and payment platform - called Yu E Bao, or "leftover treasure" in Chinese - in June to help Alipay customers convert spare cash into a money market fund holding.

In its first 18 days, the fund attracted more than 2.5 million customers and raised 6.6 billion yuan, according to Tianhong, and is expected to be one of the most successful mutual funds in the country this year.

Alibaba, which is expected to file for an initial public offering in New York next year that could value the company at more than US$100 billion, has been leading the drive by domestic internet companies into highly regulated financial services.

"Tianhong and Alibaba are mutually complementary," said Ding Xuemei, a spokeswoman for Tianhong.