Ant will differentiate the consumer loan brand in the final stage of redesign


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(Bloomberg) – Ant Group Co. has said it is repositioning its most popular consumer credit service to differentiate itself from products offered by banks, its latest step in a regulatory overhaul.

As part of the brand differentiation plan, Ant’s Huabei will become the consumer credit department of Chongqing Ant Consumer Finance Co., focusing on user needs for small to medium credit amounts, according to a letter to users. on his Weibo account. Loans fully funded by other financial institutions will come under a separate label, “Xinyonggou”, for users requiring a higher line of credit.

The move is the latest taken by billionaire financial giant Jack Ma to rectify activities ranging from payments to consumer loans and the nation’s largest money market fund. Chinese regulators scuttled Ant’s initial $ 35 billion public offering a year ago, launching a year-long crackdown to curb the skyrocketing growth of the entire internet industry and “reckless” expansion private capital.

Consumer credit has been crucial in spurring the growth of Ant’s digital finance business, which contributed 63% of the company’s revenue in the first half of 2020 before authorities triggered a barrage of rules to the end of last year. Before the regulation, only about 2% of the more than 1.7 trillion yuan ($ 263 billion) in loans granted by Ant remained on its balance sheet, with most of the funding coming from its more than 100 banking partners.

Since then, Ant and some banking partners have started cutting back on their cooperation that has fueled spending for at least 500 million people across China. Earlier this month, Ant said she was working to differentiate her Jiebei service, another short-term consumer loan product.

The myriad of restrictions means Ant is only worth a fraction of what it was before as its growth prospects dwindle, according to some of its early Wall Street supporters. Warburg Pincus lowered its valuation 15% to $ 191 billion at the end of September, Reuters reported on Wednesday. Ant earned a pre-currency valuation of $ 280 billion before its IPO ended.

As part of the overhaul, Ant also increased its capital base to 35 billion yuan and decided to build firewalls in an ecosystem that once allowed it to direct Alipay traffic, with one billion users. , towards services such as wealth management, consumer loans and proximity services and on-demand delivery. Assets under management of its Yu’ebao money market fund – once the world’s largest – fell by more than a third from late last year to 776 billion yuan in September.

© 2021 Bloomberg LP

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