Hao Liang, Jialun Wang, Gabriel Pang Keat Lim, Sin Mei Cheah, Tzu-Kuan Chiu
Singapore Management University (SMU573-PDF-ENG)
January 04, 2020
This case from January 2020 demonstrates Ant Financial’s success in promoting financial inclusion in China through its Rapid Response (QR) Business Growth Plan. Founded in 2014, Ant Financial grew out of Alipay, a mobile payments provider serving Alibaba’s e-commerce customers. Heir to Alipay’s huge customer base, Ant Financial grew rapidly and dominated 54.2% of China’s $ 7 trillion mobile payments market in 2019. The QR Merchant Growth Plan was launched in May 2018 and encourages Merchants to accept QR codes when making payments. Also known as QR merchants, these micro-entrepreneurs generally lived in the lower cities of China. The plan evolved from offering simple business loans to a multi-product suite and has since served more than 12 million microenterprises. To continue scaling, Ant Financial has set a bold goal of reaching 100 million small and micro businesses by 2021. However, the Chinese central bank had announced a new regulation that required all merchants to use a universal QR code for transactions. by 2021. Would you question Ant Financial’s dominance in the mobile payments market? Given the regulatory pressure looming, how viable will the QR Merchants Growth Plan be in the medium and long term? At the same time, Ant Financial’s foray into digitizing commercial banks is opening up new business opportunities. By providing “technology as a service” to banks, Ant Financial’s move from competitor to partner is on time as traditional banks recognize the need for digital transformation. But will the new business model work in Ant Financial’s favor to bring the next wave of growth?
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