Enterprise

Everything you need to know about Alibaba’s finance spinoff

It’ll be the world’s largest IPO

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Photo by David Dvořáček on Unsplash

Chinese financial technology giant Ant Group is all set to raise US$ 34 billion via an IPO (Initial Public Offering). The company’s share will be listed in Hong Kong as well as Shanghai. While IPO’s are a common sight, this one’s going to be a record-breaker. It’ll be the largest IPO on record, ever.

The company’s filing shows it has priced each share for US$ 10.30, giving it a market value of US$ 310 billion. Saudi Aramco, the world’s largest oil company, raised almost US$ 30 billion last year. But today, data is considered the new oil and recent technology listings has proven this. Ant’s sister company Alibaba raised US$ 25 billion in 2014 when the company got listed on NYSE.

So, the most important question remains, why is Ant Group so valuable? We’ll take a deep-dive to understand the company’s operations, investments, and strategic advantages that have earned it the high valuation today.

How was the Ant Group formed?

We’ve all heard of Alibaba, the world’s largest e-commerce company. Founded by Jack Ma, it revolutionized shopping in Mainland China forever. At the heart of this change was Alipay, a system designed to bridge the lack of trust between buyers and sellers. Even though it started functioning in 2004 as a complimentary service to Alibaba, executives realized it had much more potential and could be used outside of the e-commerce website’s umbrella.

In 2011, Alibaba spun-off Alipay into a new company that was called Zhejiang Alibaba E-Commerce Company. The name was soon changed to Ant Financial, followed by Ant Group in the coming years.

Today, Alipay has more than 700 million monthly users, and they’re just in China. On the other hand, PayPal has almost 350 million users globally. In fact, Ant Group reported revenue of US$ 17.7 billion in the first nine months of 2020, a whopping 43 percent raise over the same period in 2019.

The Coronavirus pandemic has turbocharged usage as people have turned to digital payments and e-commerce as a way of maintaining social distance.

Alipay is practically a bank

It may sound impossible, but Alipay is actually a bank without a single physical branch. It offers payment services between customers and merchants and extends loans, insurance, investment options, and more. If you want to survive in China, you can do it without any cash.

Smartphone, QR code payments

Everyone relies on their smartphone for payments, and the country has replaced plastic cards or cash in favor of QR codes. And, Alipay also ensures you don’t have to go anywhere else for your daily needs. Groceries? Alipay. Parking charges? Alipay. Flight tickets? Alipay. The answer to everything is just one app. While WeChat’s Super App model has gotten everyone’s attention, Ant Group capitalized by understanding it’s users on a more personal level.

This has been a common way of paying in China for a while. If you saw the 2018 version of popular teen drama Meteor Garden which was set in China, it was fairly noticeable that store transactions were made via QR code.

The app has access to everyone’s purchase trends, and being a payment layer, it has access to an unimaginable amount of data. Using this, it cross-sells and upsells high-value financial products, directly improving engagement and clocking consistent growth.

Instead of relying on a conventional bank, Alipay is much more convenient, faster, and accessible for the ordinary Chinese.

CreditTech

Ant Group’s most important division has to be CreditTech. It provides quick or instant credit lines to consumers and small businesses. Ant is the largest digital microfinance service provider in China and is viewed as a perfect way to infuse liquidity at the grassroots level. A conventional bank doesn’t possess the technology or the reach that Alipay can provide.

Hence, Ant Group works in tandem with banks and extends simplified financial services to everyone. The Chinese giant works with over 100 banks, and all loans are then securitized at the institutional level.

Services for everyone

Ideally, if you want a loan, you’ll have to apply in a bank, submit collaterals, negotiate the interest rate, and receive the sum. This is a lengthy and slow process that needs higher standards of due diligence. Unfortunately, hundreds of millions of people don’t have access to loans and are not included in the formal banking system.

Ant Group helps bridge this gap. With Alipay, you can maintain a digital wallet on the go, pay anyone within a second, and use other financial services within the app. Based on your spending, income, and lifestyle, the algorithm can understand you at a personal level. These data points can then be used to determine whether you’re eligible for a loan or credit line.

Instead of relying on conventional modes of applying for a loan, most users are prompted with pre-approved offers that are already made, keeping the individual in mind. It takes the platform just a few minutes to approve an application, and money is disbursed almost instantly.

The investment division of the company is called InvestTech and makes it easy for anyone to join up. Choose from a host of options like mutual funds and grow your money in the same app where you usually spend it. Similarly, it has also bridged the insurance industry within the app, and experts claim it could be the largest online insurance services platform in China in terms of premiums generated.

China loves Alipay, what about others?

Currently, 95 percent of Ant’s revenues come from Mainland China. Alibaba has already made massive international bets in markets like India, Indonesia, Thailand, and more.

Alipay supports 27 currencies and works with many international financial institutions to ensure cross-border payments for Chinese traveling overseas and facilitate the international purchase on Alibaba.

It has already won a virtual banking license in Hong Kong and is applying for one in Singapore. Cooperation and partnerships are already functional in Bangladesh, Hong Kong, India, Indonesia, Korea, Malaysia, Pakistan, the Philippines, and Thailand.

However, international expansion doesn’t look very promising at the moment because of the ongoing anti-China sentiments. The US has clamped down on Chinese technology companies like Huawei and ByteDance due to security concerns. If the world is worried about data collection via a short-video streaming app, will it be open to a Chinese company whose primary business is based on data collection?

India is a lucrative market, and Alibaba has tried to replicate the same model via its investment in super app Paytm. Indo-China relations have also radically deteriorated in recent months, and Chinese app developers have faced the consequences. Although Alibaba investments remain relatively stable in the country, new growth opportunities are bleak.

We live in a global economy today, and protectionism isn’t exactly helping anyone. However, with the boom in data, the risk has also increased manifold, and countries have to be on the lookout. In the case of Ant Group, their future within Mainland China looks very prosperous.

The most valuable unicorn on the planet is likely to make its hotly anticipated debut on Shanghai’s STAR Market and Hong Kong’s stock market on November 5, two days after the US election.

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US increases efforts to ban TikTok and other apps

New bill faces vote later this month

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March 8, 2023

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Millions of users are fans of TikTok. However, the American government is clearly not. Over the years, the country’s officials have experimented with ways to ban the platform from the American tech space. While past efforts haven’t materialized into anything concrete against the Chinese platform, a new bill might finally pave the way to ban TikTok (and other apps) for good.

Today, American senators have introduced a bipartisan bill which will give the government the necessary authority to ban TikTok from American companies. As always, the new bill is concerned about TikTok’s potential as a gateway for Chinese surveillance. If passed, it will prohibit the app from being offered through the App Store and the Play Store on American soil.

If you’ve followed the drama all this time, you might be wondering what’s new this time. Unlike other efforts in the past, the new bill isn’t just limited to TikTok. In fact, it doesn’t even name the app explicitly.

Instead, it aims to introduce a system which will ban other potentially dangerous apps from “adversarial countries” such as China, Cuba, Iran, North Korea, Russia, and Venezuela. When the next Huawei or TikTok rears its head, the government will have an established way to deal with the company, rather than going through years of discussions.

The bill must still pass through a vote later this month, so it’s still an open playing field. However, it isn’t the only effort to curb the platform. A recent act, the Deterring America’s Technological Adversaries Act, aims to deal with the app directly.

SEE ALSO: TikTok is now under investigation by the European Union

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Enterprise

Qualcomm announces world’s first iSIM

Coming with the Snapdragon 8 Gen 2

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March 1, 2023

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Though the technology is ubiquitous today, there’s still a sense that eSIMs are still working their way into the mainstream. However, the world keeps turning and is already on its way towards the next big thing. Today, Qualcomm has announced what that next big thing is: iSIM.

Qualcomm and Thales have officially confirmed that the world’s first commercially deployable iSIM will arrive on the Snapdragon 8 Gen 2 chipset. All devices with the chipset will be able to enjoy the benefits of the burgeoning technology.

Now, let’s get the biggest question out of the way: What is an iSIM?

SIM cards, as we knew them back then, are little chips we inject (or used to inject) inside smartphones. Over time, the telecommunications industry developed the eSIM (or embedded SIM). Instead of a manually swappable chip, the eSIM is an even tinier chip physically soldered into the smartphone. Telecommunications networks can just digitally install the network data directly into the eSIM.

The iSIM, or integrated SIM, shrinks things even more. Instead of a physically soldered chip, the SIM is now installed inside the hardware, taking up less than 1mm2 of the device’s real estate. Though the difference seems miniscule, freeing up this much space leaves room for improvements in other components. Additionally, an iSIM takes up less power than traditional SIMs and eSIMs.

Qualcomm is already hopeful for the technology, expecting iSIM shipments to grow to 300 million devices by 2027.

SEE ALSO: Qualcomm partners with Mercedes-AMG in F1

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Enterprise

Nokia has an all-new logo

After 55 years with the old one

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February 28, 2023

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Image source: Nokia

In the world of old tech, the Nokia logo is all-enduring. If you lived through the early days of mobile phones, you’ll recognize the simplicity of the Finnish company’s dark blue logo emblazoned on every device back then. Now, after five-and-a-half decades, Nokia is changing things up a bit with a brand new logo.

During MWC 2023, Nokia unveiled a new logo to reflect what the company stands for today. For a company that’s existed since the 1800s, the new logo is as youthful as a startup today. The new logo features a more open font and a brighter blue.

Though the company eventually got its big break for creating one of the most iconic mobile phones in history, Nokia is much more than just a phone brand. The company now handles a wider net of telecommunications technologies. To reflect that, the new logo aims to bring the company’s perception to the present and the future, while paying homage to the era that put it on the map.

If you’re wondering what that means for the brand’s modern smartphones, the old logo isn’t going away entirely. According to Nokia, the deal with HMD Global (which handles the brand’s smartphones today) will retain the old logo for the foreseeable future. In the meantime, both logos will exist in separate spaces. The old logo will exclusively pertain to the brand’s smartphones, while the new logo will usher in the brand’s endeavors in other industries.

SEE ALSO: Nokia seeks to kill OPPO’s sales in some countries

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