Alibaba Group launches a new investment product on its Alipay online payments platform, allowing users to buy into a money market fund. Alipay aims to offer a new investment channel for users, and money market funds have less risk than other financial products, Fan Zhiming, president of the domestic business group with Alibaba’s small and micro financial services unit, said at a press conference.
The first money market fund available on Alipay will be Zenglibao, offered by Tianjin-based Tianhong Asset Management Co, with a minimum investment of 1 yuan ($0.16) and no maximum limit. Zenglibao’s average annual compound rate of return for seven-day periods reached 3.981 percent by Sunday, higher than the current one-year fixed deposit rate of 3.25 percent, according to the data provided by Tianhong.
Alipay has 800 million users representing a pool of prospects thus Alipay will be an excellent distribution channel for Tianhong Asset Management Co. Wang from iResearch said Alipay’s large user base could not be overlooked, but the market reception of its new service will also rely heavily on the capacity of Tianhong, as people often prefer large companies for managing their assets, and Tianhong has not achieved that scale yet.