There is more restructuring underway for Jack Ma’s Ant Group with Chinese authorities reportedly seeking to break up Alipay, its super app with over 1 billion users.
Chinese officials want Ant to make its traditional credit card and small unsecured loans business – Huabei and Jiebei, respectively – into two separate apps, breaking up what used to be a single Alipay app.
The plans also require Ant to turn over user data to a new partly state-owned credit scoring joint venture.
The government believes big tech’s monopoly power comes from their control of data, said one source. It wants to end that.
The reported deal that will make Zhejiang Tourism Investment a majority shareholder is considered favorable for Ant due to its relationship with its home province.
Given the mutual trust between Ant and Zhejiang, the fintech group will have a big say on how the new JV operates, said an unnamed former Chinese central banking official. But the new set-up will also make sure that Ant listens to the party when it comes to critical decision-making.
What does Zhejiang Tourism Investment Group know about credit scoring – nothing, said another source who noted while Ma’s team would lead the venture, there was concern about future loss of control.
The Huabei and Jiebei businesses fall under a ‘CreditTech’ unit and is a leading revenue generator for the fintech giant.
Last year, it issued about one-tenth of the non-montage consumer loans in the second-largest economy in the world.