Suning gets approval to set up insurance joint venture

Suning Commerce Group Co gained official go-ahead on Monday to set up an insurance sales joint venture, becoming the first e-commerce company to tap into the insurance sales arena.

Suning Commerce Group will invest 90 million yuan in the joint venture with a registration capital of 120 million yuan ($14.84 million), while its shareholder, Suning Corp, will fund the remaining portion, the China Insurance Regulatory Commission (CIRC) said Monday in a notice on its website.

The insurance sales business is a key step in the company's expansion into Internet finance, Suning Commerce Group said in an announcement late Monday.

The company will strengthen its capability in the promising insurance sales sector, it said.

Suning's offerings in the Internet finance battlefield already cover third-party payments and small loans.

The Nanjing-based home appliance retailer had partnered with insurance companies including Ping An Insurance, China Pacific Insurance and Taikang Life to engage in insurance sales business via the launch of an insurance channel on its e-commerce site in August 2012.

The user base that Suning has already built up after years of growth in both online and offline segment could help the company reach out to the insurance sales market, Feng Lin, an analyst at the China E-Commerce Research Center, told the Global Times.

But the analyst warned the country's marketplace for online insurance sales business is barely fledged, rendering any early entry into the market a risky move.