Chinese internet company Tencent has launched China’s first online-only private bank. WeBank, named after Tencent’s popular WeChat messaging service, is now operational after the Chinese financial service regulator granted Tencent a licence in 2014.
China is aiming to boost banking competition in the country in order to aid small businesses seeking financing. According to Chinese premier Li Keqiang: “We will lower costs for and deliver practical benefits to small clients, while forcing traditional financial institutions to accelerate reforms. It’s one small step for WeBank, one giant step for financial reform.”
Also receiving a licence was Tencent rival, e-commerce giant Alibaba, although it’s not yet clear when Alibaba will launch a banking service. Alibaba itself is facing a challenge in the e-commerce area after rival Wanda E-Commerce raised CNY 1 billion in funding, in a move which has caused its valuation to rise to more than CNY 20 billion. Wanda E-commerce expects to be fully operational in the fourth quarter of this year, and intends to hold a second round of funding at a later stage.
Founded in August 2014, Wanda E-Commerce is a joint venture between Wanda, Tencent and Baidu. Tencent and Baidu each hold 15% of the company. Wanda E-Commerce uses Tencent products such as AliPay rivals TenPay and Weixin Payment, and will help Tencent to capitalise on the e-commerce potential of WeChat.