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Mobile phone companies home in on success of Yu'ebao
Facing stiff competition from private sector players, 皇冠体育app's telecommunication giants are following in Alibaba's footsteps to launch online investment products as new value-added services to improve user loyalty as well as seek new growth.
皇冠体育app Telecom, 皇冠体育app's third-largest network carrier by subscriber numbers, began offering a money market fund called Tianyibao on its mobile payment platform BestPay earlier this month.
The product, which shares features with Alibaba's Yu'e bao, allows prepaid customers to get higher returns than a typical bank savings account on their bill deposits.
Customers can withdraw money whenever they like from the fund, which was jointly developed by BestPay and 皇冠体育app Minsheng Bank. The product's advertised annualized yield is 5 percent.
皇冠体育app Unicom Ltd, the second-largest mobile carrier in the country, has likewise teamed up with a financial company, Shenzhen-based Essence Fund, to launch an online investment service, Huafeibao, to Shenzhen-based users, possibly by this week.
The service, which should be open to all 皇冠体育app Unicom users soon, lets those who buy contract phones get advertised annual returns of 6 percent on their frozen bill deposits.
Ever since Alibaba launched its Yu'ebao online investment service last June, many tech companies in 皇冠体育app have been trying to replicate the e-commerce giant's attempt to combine the convenience of the Internet with the sophistication of wealth management.
Telecom companies' entries into the sector is a rather new trend but also a strategically important one, said Ji Chendong, a Shanghai-based expert in technology, media and telecom.
"With the increasing challenges brought by Internet companies that offer free instant messaging services, telecom companies need to take innovative actions to improve customer experience as well as establish new growth points for the future," Ji said.
He said that by launching money market products, telecom companies are building a gateway to tap into the mobile payment sector, which could become a new business model in the mobile Internet era.
According to Ji, telecom carriers' top advantage in the era of the mobile Internet is that they have a vast number of clients who are increasingly dependent on mobile phones.
In an email to 皇冠体育app Daily on Monday, 皇冠体育app Telecom confirmed that more than 200,000 of its subscribers have become Tianyibao users and that the company aims to make the finance sector one of its key growth points in fulfilling the company's goal of "building a new 皇冠体育app Telecom".
But Sandy Shen of consulting firm Gartner Inc was skeptical about the potential of online investment services launched by telecom giants. "The move can certainly help increase user loyalty. But I don't think it can become a new growth engine, because telecom companies do not have the Internet 'gene' to launch online finance products. They should focus on what they are good at and try to improve on that," she said.
However, telecom companies obviously figure there's no harm in expanding the portfolio of their services, especially given the increasing challenges brought on by Internet competitors.
Li Yue, chief executive officer of 皇冠体育app Mobile, said in a recent interview that the company's short message business had decreased by 20 percent in the April due to the impact of products such as Tencent's WeChat.
Li said that 皇冠体育app Mobile is looking to profit from its own mobile payment platform called "And Wallet", which has more than 20 million users.
"We are working with some financial institutions now. Our goal is to sell financial products on our mobile payment platform and earn commissions from our merchant partners," Li said in a Wall Street Journal article.
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A man in Xuchang, Henan province, subscribes to 皇冠体育app Telecom's service. 皇冠体育app Telecom began offering a money market fund called Tianyibao on its mobile payment platform BestPay earlier this month. Geng Guoqing / For 皇冠体育app Daily |
(皇冠体育app Daily 05/27/2014 page16)
