The
People's Bank of China issued third party payment licenses to 27 companies on
July 6, including Baidu's Baifubao and Sina's SinaPay.
Baifubao
was launched on Sept 25, 2008 as an online payment and service platform. In
recent years, Baifubao has been exploring the field of electronic commerce. The
license grant is expected to benefit Baidu's e-commerce business.
According
to China Business News, in addition to e-commerce, Baifubao is also eyeing
personal payment services. Baidu had disclosed a structural adjustment plan in
June, where it said it would form a department related to front-line payment
collection, with a focus on personal accounts.
The most
common online personal payment services involve online video games, e-commerce,
music and digital reading.
At a summit
in May this year, Robin Li, founder of Baidu, noted that, "payment
services in the online video gaming sector are a 'tremendous' business."
The daily
reported that there were more than 100 types of video games on Baidu's network
and more than 100 million users. Video gaming could very likely become one of
the main income sources for Baidu.
According
to the daily, Sina was apparently aiming to secure a third party payment
license. Currently, the Sina Weibo microblog has more than 500 million users,
but revenue from advertising during the first quarter this year was only
US$18.8 million. Seventy-seven percent of Sina Weibo's income comes from
advertisement.
After
Alibaba Group Holding invested US$586 million in Sina Weibo, Sina certainly
hopes to take advantage of Alibaba's client resources to speed up its
commercialization plan. Sina Weibo is also looking into other value-added
services, such as online shopping malls and a membership system.
In terms of
online business planning and strategy, the online competition is very likely to
move from business patterns to other areas, such as user volume and
partnership.
Senior
analyst Zhang Meng said that after obtaining the licenses, both Baidu and
Sina's business planning would involve more payment services for their own
products, rather than payment services for outside businesses.
A report by
the Payment and Clearing Association of China in June stated that the scale of
the third party payment market in China had exceeded 10 trillion Chinese yuan
(US$1.63 trillion) in 2012.
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