Magic Caves of Alibaba

TECHINASIA: Alibaba’s spin-off finance subsidiary, Ant Financial, today put out a major new update to its Alipay mobile wallet app. For the first time, the mobile wallet now has e-commerce merchants and shopping baked right into the app. It means that within Alipay, which is China’s top mobile wallet service with over 400 million annual active users, people can now find local services like fresh flowers, which can be delivered next day flowers right at your doorstep, or food delivery, and then pay for them all in the same app. As in Alibaba’s other marketplaces, all the things are from third-party sellers.

“Our payment capabilities are the backbone of the app, now we are providing value-added services for both small merchants and retailers and users,” said Fan Zhiming, president of Ant Financial’s payment business unit, in a statement.

This major update is related to last month’s formation of a RMB 6 billion (US$970 million) joint venture company between Alibaba and Ant Financial to focus on web-connected on-demand services, such as food delivery. The joint venture is called Koubei. Alibaba confirmed today that the Koubei on-demand marketplace is what now appears in the “Merchants” tab in the updated (version 9) Alipay app on iOS and Android.

Alipay’s new O2O (online-to-offline) feature is a threat to a new wave of local on-demand startups that have popped up in China in the past couple of years, such as for food. While Alibaba is China’s top ecommerce company, it’s weaker in the new O2O areas that are growing fast in the country, like on-demand beauticians, manicurists, cleaners, or car repair mechanics. The big investment in Koubei and today’s mobile wallet update are designed to fix this.

KAPRONASIA: The versatile internet powerhouse Alibaba group is now sitting on the goldmine of big data and is innovatively monetizing it through internet finance. This time Alibaba Group’s online payment system Sesame Credit applies the cutting edge big data-based credit rating system in partnership with Luxembourg’s Consulate General in Shanghai for a launch of a credit-based visa application service.

The regular process of obtaining a Luxembourg Visa is quite complicated in China. Bank records have to be handed in as proof of assets and the process is time consuming. But now, Chinese traveler can easily obtain a Luxembourg visa through Alibaba’s tour service Alitrip with a certain level of Sesame Scores. For applicants with a 750 score or more, the Luxembourg Consulate in Shanghai will accept their personal Sesame Credit reports as a proof of financial capability. All original documents will still need to be provided to the Consulate at a later stage as Schengen rules require.

Sesame Credit is a credit scoring system that generates individual credit scores for individuals by tapping into Alibaba Group and Ant Financial’s vast online ecosystem and other personal credit information sources. Sesame Scores, which range from 350 to 950 points, are calculated based on five factors – credit history, behavioral preference, fulfillment capability, personal attributes and social network – and are indications of a user’s creditworthiness. Alitrip has already been incorporating the use of Sesame Scores into its travel service to lower Chinese traveler’s cost of outbound travels. The next step for Alitrip and Sesame Credit is offer online visa application service to more global destinations.