An Analysis of E-commerce Industries Branched out into　Internet Finance – A Case Study of Ant Financial Services Group

Internet Finance or called Fintech, changing the payment instruments, wealth management and other acts of finance. In 2015 the World Economic Forum presents six topics of Fintech innovation, showing the traditional financial intermediation function will be replaced by Fintech. In China, in the development path of Alibaba’s e-commerce, Alibaba built the e-commerce ecosystem by controlling three core resources, the information flow, design flow and service flow, to become a provider of e-commerce foundation service. There are two major breakthroughs, Alipay and CXT (Trust Pass), controlled the financial intermediary function of payment and information providing. Besides the Alibaba ecosystem accumulated huge number of users, so that Alibaba launched two services called “ Alipay Bao” and “Ali small loan business”, credit business also launched “ZHIMA credit”. Finally, in 2014 launched the “Ant Financial Services Group”, the independent financial-related business, creating new business ecosystems and interacting with Alibaba’s e-commerce ecosystem. Ant Financial Services Group was by Alibaba users to grow in various stages of growth, from the ecosystem view, Alibaba used the accumulated information on its own platform to envelope to launch financial, consultants, advertising, business management related services, and adopt open mode makes suppliers easily open their shop on the platform; while consolidating the line of logistics, finance companies, to provide information and clearing business by information providing, and to pay the bill by Alipay as the only touch point, so that Alibaba grasp contact and the terminal processing of information, can higher the switching costs to lock customers. Since the information has the characteristics of indivisible and non-transferable, making the ecosystem of high switching cost. On the other hand, to solve the information asymmetry between the two sides must rely on credit rating and credit guarantee, ZHIMA credit controlled the core of the credit rating mechanisms. When all the information is controlled by Ant Financial Service Group, it can launch new business based on these resources. Unless there appears killer application, it would be difficult to replicate the same growth pattern to success.