As Ant Financial pushes its global drive to tap into Hong Kong's cashless payment market, the tech giant is forming a joint venture with tycoon Li Ka-shing's CK Hutchison Holdings (CKH) to sign up more local users.
The two companies are poised to set up a 50-50 joint venture to offer a consumer-oriented digital wallet under the AlipayHK brand. The deal is expected to be completed later this year, subject to obtaining the nod from regulators.
Neither company has disclosed the amount of their contribution to the joint venture. But market experts speculate that the parties are not disclosing the figures due to the negligible amount compared with the companies' massive portfolios.
Ant Financial, the financial services arm of Chinese mainland e-commerce titan Alibaba Group Holding and operator of the world's largest online payment app Alipay－entered the Hong Kong market with AlipayHK mobile wallet in May this year.
The e-payment app attracted more than 100,000 active users in the two weeks since its launch, and is now accepted at more than 4,000 leading retail brand outlets in the city.
Ant Financial's expansion in Hong Kong is highly aligned with CKH's line of business, which has a strong presence in retail, infrastructure, energy and telecommunications in the city. The group boasts personal care store Watsons, supermarket ParknShop and electronic store Fortress, among many other flagship companies in Hong Kong.
Ant Financial said in a statement that apart from mobile payment, Alipay's many in-app lifestyle features and third-party insurance products are among the traits that drew the attention of CKH. Currently, Hong Kong users can easily buy travel insurance and accident insurance from mainland insurance companies such as Ping An and China Life through AlipayHK.
Martin Bao, senior analyst of ICBC International, said the partnership is a big step in Alipay's global drive. Alipay has extended its cashless payment network in many countries but is mostly for the convenience of mainland tourists going abroad. The alliance with local partner CKH demonstrates Ant Financial's ambition to woo local users, he said.
Currently, the most dominant cashless payment in Hong Kong is the Octopus card, a rechargeable card that is widely accepted by Hong Kong residents to pay for transportation, as well as items at convenience stores and small retailers. Yet Bao said the pre-top up mode, which requires citizens to top up the balance before paying, occupies a portion of citizens' disposable capital, and is less convenient than Alipay's real-time payment system.
Ant Financial, hailed as the mainland's biggest unicorn with an estimated valuation of more than $60 billion, is considering going public in the mainland or Hong Kong.
