Ant Financial Services Group, a Alibaba Holdings (BABA) e-commerce affiliate, reportedly announced a new payment option called Huabei or Just Spend. This payment option will allow shoppers on Alibaba’s Tmall and Taobao e-commerce sites to take out month-to-month loans of up to $4,800
According to a report by 2Tech Asia, Alibaba has yet to announce the official release date, as the service is still in beta testing stage.
Just Spend
According to reports, The Just Spend service will enable consumers to pay off debts up to a month after delivery provided they spend a minimum of $160 on purchases. Consumers are estimated to clear their loans by the 10th day of the month subsequent to the delivery.
Others Who Offer Similar Services
There are not many credit services in China. However, these are gradually gaining ground as the country's young consumers are leaning toward taking debt. Historically, Chinese consumer spending has been cash dominated however demand for credit services is gaining momentum.
In February, Chinese e-tailer JD.com (JD) rolled out a credit option, providing $2,400 loan on a similar 30-day repayment plan.
Last year, web portal Sina (SINA) opened a credit service called Xinyongbao.
Ant Financial Services
In October, Alibaba changed the name of its Alipay financial services affiliate to Ant Financial Services Group. This marked a push into the financial services industry
Ant Financial supervises six financial service entities associated with Alibaba– Alipay; Alipay Wallet; Yu'e Bao, a money market fund; Zhao Cai Bao, a third-party financial services platform; micro-loan provider Ant Micro; and MYBank, a private bank.
Ant affirms that more than 1 million vendors are in favor of the credit service, which formally is in a test mode.
Jack Ma has assured an Alipay IPO will happen in time. Alibaba will have a 33% stake in the online payments giant when it takes place. Pac Crest has valued Alipay at $70B.
Alibaba currently holds a Zacks Rank #3 (Hold). Investors can consider Mercadolibre, Inc. (MELI) as it sports a Zacks Rank #1 (Strong Buy).
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