description

The Chinese Internet giant Alibaba is transforming from an e-commerce player to a financial service provider. What makes Alibaba’s Internet financial services innovative? What managerial challenges are there for an e-commerce company to run financial services? And what regulatory challenges does Alibaba face?

Objective

After discussing this case, students will be able to: 1. Describe Alibaba's financial innovations and attempt to disrupt the financial service sector. 2. Compare and contrast Alibaba's move into online financial innovations with the strategies and product offerings of other competing Internet companies in China. 3. Understand the reasons why Alibaba is diversifying into financial services. 4. Interpret the Chinese context for financial innovation and its impact on Alibaba's transformation from an e-commerce player to a significant financial service provider.

Citation Note

Based on field research; 17 pages.

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Abstract

Alibaba has been heavily involved in financial innovations in China, offering services such as online payment, online retail wealth management and purely online insurance through its daughter companies Alipay, Ant Financial, and others. Internet-driven finance innovation is a driving trend in China, as opposed to countries such as the USA and the UK where the likes of Google and Facebook are dominant Internet companies but are not heavily involved in internet-driven finance. Considering that the financial sector is highly regulated in China, Alibaba's role is ironic and heroic at the same time. Why are Alibaba’s Internet financial services innovative? What managerial challenges are there for an e-commerce company to run financial service? And what regulatory challenges are facing Alibaba? Who are competitors for Alibaba in this sector? What is the impact of Alibaba’s financial innovation on China’s financial system? How does big data analytics facilitate financial services? The case shows how an emerging Chinese Internet giant transforms from an e-commerce player to a significant financial service provider. It presents the managerial and regulatory challenges Alibaba encounters in this transformation and showcases its success in China's reforming financial sector.

Type
Case Study