Alibaba Group Continues Aggressive Expansion into Global Financial Technology Services

On April 19, Chinese e‑commerce company, Alibaba Group, acquired Singapore-based payment service platform helloPay Group for an undisclosed sum.  The deal was struck through Alibaba’s investment arm, Ant Financial.  The digital payment service will be re-branded under Alibaba’s existing service, Alipay, in markets across Asia including, Singapore, Malaysia, Indonesia, and the Philippines.

In April 2016, Alibaba acquired helloPay’s parent company, Lazada Group, for $1 billion with the intent of strengthening Alibaba’s market position in Southeast Asia.  Alibaba’s subsequent acquisition of helloPay marks the first re-branding effort in the company’s recent campaign to accelerate financial technology (fintech) acquisitions.

China has surpassed the United States to become the leading global investor in financial technology services that include digital payment platforms and online lending.  A report released by Citigroup concluded that China accounted for more than 50% of global fintech investments in the first nine months of 2016.  This boom into complementary technology sectors, such as e‑commerce, has been supported by Chinese government.

In February, Alibaba subsidiary, Ant Financial, announced that it was raising approximately $3 billion in debt financing to be used to fund acquisition deals.  Ant Financial has sought to invest in other local fintech companies worldwide, such as Mynt in the Philippines, Paytm in India, and most notably, a pending $880 million acquisition of US-based MoneyGram. The latter will likely face a challenge from the Committee on Foreign Investment in the United States (CFIUS).