BIZCHINA / Top Biz News
ICBC, Alibaba sign e-commerce deal
By Zhang Lu (China Daily)
Updated: 2006-05-24 08:59
The Industrial and Commercial Bank of China (ICBC) and Alibaba Group
teamed up yesterday to further promote the development of e-commerce and
e-banking.
The two sides signed an overall strategic co-operation deal yesterday in
the capital city of East China's Zhejiang Province.
The new deal is an expansion of the two companies' existing online
payment partnership formed a year ago.
"During a year's co-operation, we found there is huge potential for
further co-operation," said Jack Ma, chairman of Alibaba Group.
From January to April, Alipay, or Zhifubao, a third-party online payment
company under the Alibaba Group, dealt 6.29 million transactions with a
total trading value of 1.12 billion yuan (US$140 million).
The transactions in the four months almost equalled the total
transactions in 2005, indicating rapid growth in online business, said Ma.
Over 40 per cent of the total online transactions were made through ICBC
accounts.
Therefore, "we will work closely with our key partner on wider aspects,
to provide more value-added services to our clients and to better develop
e-commerce in China," he said.
Security issues around online payment were the initial focus of the
partnership, given the rapid development of e-commerce and the growth in
online theft.
To boost online payment, Alipay will now accept the U key digital
certificate issued by ICBC, which could both help control risk and
facilitate clients from both groups.
Alipay now has over 17 million clients, with a daily trading volume
exceeding 30 million yuan (US$3.75 million).
Late last year, the Chinese Academy of Social Sciences released a report
saying that there are risks associated with online payment as the
management of clients' capital lacks transparency and third-party payment
companies could transfer or embezzle funds.
"We set a special custody account for our clients' capital in ICBC, and
the bank will release the custody information every month to keep our
clients informed," said Qiu Changheng, an Alipay official.
ICBC will release its first report soon.
The capital deposited in Alipay currently amounts to hundreds of millions
of yuan, Qiu said.
The co-operation between the two firms also covers areas including
financial consultancy to Alibaba's 13 million online small- and
medium-sized enterprises, and joint marketing in B2B, B2C and C2C sectors.
"Online payment has become one of the most outstanding businesses for
ICBC, China's largest e-bank," said Yang Kaisheng, president of ICBC.
Last year, the bank's online payment business reached 11.6 billion yuan
(US$1.45 billion), 120 per cent up on the previous year.
During the first four months of this year, the figure was 6.56 billion
yuan (US$820 million), a year-on-year growth of 100 per cent.
In addition to Alibaba, the bank also co-operated with many other
e-commerce companies like Shanda and cncard.com.
The bank has been trying to improve its profitability as it is seeking a
public listing this year.
(For more biz stories, please visit Industry Updates)
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