Alibaba Group’s restructuring of agreements to gain a bigger share of earnings from its payment affiliate highlights the growing importance of financial services to the Chinese e-commerce giant’s future.
Alipay, launched in 2004 and mainly a payment system for Alibaba’s online shopping site, is now a part of everyday life in China. Its services reach far beyond its original role of processing Alibaba’s e-commerce transactions. Chinese consumers use Alipay to pay for restaurant meals, movie tickets, taxi rides and even utility bills. Alipay also allows them to invest in financial products such as a money-market fund, which typically offers higher interest rates than Chinese banks.