ICBC launches Internet finance brand

Industrial and Commercial Bank of China (ICBC) on Monday launched its first Internet finance brand that integrates services such as online payment, financing and investment to fast-track its expansion into the country's promising Internet finance space.

The "e-ICBC" brand will also combine the bank's existing e-commerce business, product direct-selling units, and instant communications, the world's largest lender by assets said Monday in a statement posted on its Weibo account.

There will be massive opportunities in Internet finance, as the central government is pushing forward development of the sector and improving regulations in it, the lender's chairman Jiang Jianqing said at the launch conference in Beijing.

Analysts said that ICBC's launching of a brand for its Internet finance services is an attempt to grab some of the attention away from tech companies like Tencent Holdings and Alibaba Group Holding, which have already rolled out services such as wealth management and online payment.

"In confronting Alibaba's established e-commerce marketplaces and payment tool, traditional banking institutions, newcomers in the Internet finance sector, need to put in significant effort in marketing to promote the selling points of their products," Ma Tao, a senior analyst with Beijing-based market research firm Analysys International, told the Global Times Monday.

According to ICBC's statement, its e-commerce business gathered 16 million registered users in more than a year since its establishment, handling turnover of 100 billion yuan ($16.1 billion), and its online payment system has had over 50 million users within a year.

However, the figure is far less impressive when compared with Alibaba, which said in a financial report in late January that it raked in 787 billion yuan from its e-commerce units for the third quarter, up 49 percent year-on-year.

Alibaba's payment arm Alipay, which seized a 49.6 percent share of the 8-trillion-yuan online payment transaction market, is continuing to lead the market in 2014, according to a report released by Beijing-based market research consultancy iResearch on March 4.

Alipay said in an e-mailed press release to the Global Times on Monday that its users are now able to buy real estate developed by Franshion Properties (China) Ltd via Alibaba's customer-to-customer site taobao.com, signifying some challenges to ICBC's attempt to boost its e-commerce business in partnership with property developer China Vanke Co.

Yu Liang, president of Vanke, was quoted by media reports as saying at ICBC's conference that the company hopes its sales of real restate via ICBC's e-commerce platform can hit 10 billon yuan in 2015.

Ma said that there will be little chance for ICBC to exceed Internet companies in terms of e-commerce and online payment in the short term, but the bank can gain a spot more easily in the pantheon of P2P (peer-to-peer) lending platforms.

ICBC's P2P platform for small and micro-sized businesses has granted loans worth 1.6 trillion yuan to 69,000 clients, read the statement.

ICBC's online lending services will be more appealing and reliable in the eyes of lenders and borrowers, citing the bank's strong ability in risk control and financial analysis, Wang Weidong, an industry analyst with iResearch, told the Global Times Monday.

Given the low entry threshold, China's P2P industry is mixed, with 69 out of nearly 2,000 P2P lending platforms experiencing problems such as bankruptcy in January, according to industry information provider wangdaizhijia.com.

Analysts said that the market will be reshuffled soon, as Pan Gongsheng, deputy governor of the People's Bank of China, the country's central bank, said during the annual sessions of the national legislative and consultative bodies, that regulations and rules for Internet finance are expected to come out in the first half of this year.

When it comes to competition with other banking institutions in Internet finance, Ma remarked that ICBC will stand out, thanks to its advantages in user base and technology, although it is not the first to actively embrace the Internet.

In June 2012, China Construction Bank launched its e-commerce platform buy.ccb.com to further its presence in the Internet finance sector, while Agricultural Bank of China rolled out similar e-commerce marketplaces in April 2013. Also in April 2013, China Merchants Bank launched an online lending platform for small enterprises.