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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