Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

Alibaba Group Holding Ltd, the largest e-commerce company in China, will use its finance arm to create a marketplace for 1 trillion yuan ($163 billion) of loans. The company is stimulating more Chinese citizens to borrow and lend money and is planning to bring its idea to life in as soon as two years.

The platform Zhao Cai Bao, which is oriented towards small businesses and individuals and provides them with the opportunity to acquire loans directly from investors, was created by the Chinese e-commerce group in April this year. The General Manager of the financial arm of Alibaba – Mr. Yuan Leiming, who also runs Zhao Cai Bao as Chief Executive Officer, revealed in a statement that the marketplace has already expanded to 14 billion yuan.

As reported by Bloomberg, Mr. Yuan Leiming said at the Hong Kong Institute of Bankers conference: “There was a strong demand for investment products that provide higher returns. Think of us as an exchange for loans.”

According to information on the companys website, Zhao Cai Bao has listed about 11 000 products, with a minimum annualized return on a 6-12-month loan of 5.5%.

Apart from its push into the financial sector, Alibaba faces a serious expansion. The company is not only the biggest e-commerce company in China, but also manages one of the largest online-based advertising businesses there. According to iResearch estimates, advertising currently generates more than half of the total revenue of the company. Now, after carrying out its Initial Public Offering that turned out to be the biggest one in history, Alibaba faces the challenge to shift its ad platform from personal-computer websites to mobile applications in order to expand its reach among larger number of customers.

Alibabas ad revenue is generated through its Taobao marketplace, which has an incorporated search engine that operates similar to Googles AdWords. The search engine allows users to look for a certain product by typing keywords and the results are visualized in four columns. However, an additional, more visible, column is displayed on the right and highlights the products of merchants who have paid Alibaba to list their products there. Positions in the paid column are auctioned and the item that appears on the top belongs to the merchant who paid the most. Bid prices vary depending on how much merchants are willing to pay per click on their products.

Apart from its positions in advertising and the recently founded loan marketplace, the e-commerce group already owns a small-business lending division called Yu’E Bao, a payment service similar to Paypal dubbed Alipay, and is near to submitting an application for a banking license.

Alibaba Group Holding Ltd fell by 3.03% on Tuesday to close at $87.17 per share in New York. The company is valued at $214.87 billion. According to CNN Money, the 6 analysts offering 12-month price forecasts for Alibaba Group Holding Ltd have a median target of $97.50, with a high estimate of $125.00 and a low estimate of $80.00. The median estimate represents a +11.85% increase from the last price of $87.17.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News

  • Germany’s CPI inflation lowest since March 2021Germany’s CPI inflation lowest since March 2021 Annual consumer price inflation in Germany has eased to its lowest level since March 2021 in August, a preliminary figure showed.Annual CPI inflation stood at 1.9% in August, while easing from 2.3% in July.In comparison, market […]
  • Forex Market: EUR/USD daily forecastForex Market: EUR/USD daily forecast During yesterday’s trading session EUR/USD traded within the range of 1.3679-1.3714 and closed at 1.3703.At 6:22 GMT today EUR/USD was adding 0.04% for the day to trade at 1.3706. The pair touched a daily high at 1.3709 at 5:20 […]
  • Commodities trading outlook: gold steady, copper rebounds on China monetary easingCommodities trading outlook: gold steady, copper rebounds on China monetary easing Gold was steady in quiet trade on Thursday as investors weighed global stimulus against prospects of rising rates in the US, while assets in the SPDR Gold Trust fell to the lowest in six years. Copper recovered from an eight-month low […]
  • Crude oil trading outlook: futures fall on discounts in Asia and USCrude oil trading outlook: futures fall on discounts in Asia and US Brent and West Texas Intermediate slid for a second day as Saudi Arabia reduced its crude prices in Asia and the US, further providing evidence that the country has no intention of supporting oil prices.January US crude gained 0.84% on […]
  • Gold trading outlook: prices headed for sizable weekly dropGold trading outlook: prices headed for sizable weekly drop Gold futures were trading slightly higher this morning in Europe, after sliding on upbeat US data yesterday. Investors now eye upcoming speeches by US and European monetary policy chiefs, as interest rates are on the agenda.Gold futures […]
  • Intel share price down, sees lower first-quarter salesIntel share price down, sees lower first-quarter sales Intel Corp. slashed its previous first-quarter revenue target by around $1 billion on Thursday citing lower demand for corporate personal computers.The Santa Clara, California-based chipmaker said that more businesses held back from […]