Alibaba secures Chinese government approval to sell funds on Taobao as it continues to disrupt the banking sector

Alibaba Chairman Jack Ma singing at Taobao’s 10th anniversary celebration

Chinese tech giant Alibaba has received approval from the China Securities Regulatory Commission to conduct sales of fund products on Taobao, the company’s widely-used e-commerce platform.

According to Techweb (hat tip Reuters), Alibaba has already inked partnerships with 14 companies to offer fund products and other financial services to consumers. The companies will offer a range of different products, but by and large are veering on the side of caution. Conscious of how ordinary consumers might be unfamiliar or skeptical of online finance, firms are mostly offering low-risk bonds and currencies.

The move marks the latest stride in Alibaba’s march into the online banking sector. The company’s financial product portfolio Alipay, the third-party payment platform which currently occupies 40 percent of the market.

Also under Alibaba’s belt is investment service Yu’e Bao, which launched last June and picked up 2.5 million registered users before the month’s end. To date, that number has increased more than fivefold to 13 million registered users, who have collectively invested over RMB 55.7 billion (about $9.14 billion). The company has also formed a strategic tie up with China Minsheng Banking Corp Ltd, the country’s seventh-largest bank.

Jack Ma also made headlines in the domestic media last week after making public statements decrying the state of the banking industry in China. At the Second World Zhejiang Entrepreneurs Conference, Ma addressed the audience stating (translation ours):

It would be a tragedy to wait for policies to change. What we want to do is push for reform. Small businesses on Alibaba tell us that if they have no money then they won’t be able to go on. They go to the banks, and the banks say they can’t do anything. So they can try us.

Alibaba is not without company in the online finance space, as fellow tech giants Baidu and Tencent has also begun offering financial services in order to expand its product portfolio. Earlier this month Baidu launched Baifa, a wealth management service, and it quickly accumulated RMB 1 billion on its first day live.

(Editing by Paul Bischoff)