The webpage of 360buy.com. (Internet photo)
After Chinese e-commerce company 360buy (Jingdong Mall) forayed into the financial sector, its competition with rival Alibaba Group, the owner of shopping website Taobao, has shifted focus from a fight for e-commerce users to financing suppliers, Shanghai's First Financial Daily reports.
On Nov. 27, 360buy signed an agreement with the Bank of China's Beijing branch to jointly launch an online financial services platform for suppliers to 360buy.
A company spokesman said 360buy has 10,000 suppliers and its agreement with the bank would allow it to provide financial support to them. Currently, 360buy has drawn loans worth US$1.5 billion from local banks, including a 5 billion yuan (US$800 million) loan taken from four major banks, which will be lent to suppliers.
360buy's financial services include business-to-business (B2B) and business-to-consumer (B2C) services. B2B includes providing financial and investment services to suppliers.
A source from Bank of China told the newspaper that 360buy's suppliers may take out loans from the bank by providing a guarantee from a third-party insurance institution.
Along with providing B2B services to upstream suppliers, 360buy also plans to set up a financial channel for ordinary customers, including for insurance, finance management, and gold and credit transactions.
The report said the two e-commerce companies are expected to compete in the online financial services sector. Alibaba has set up a company for lending small loans through its Alipay service, China's leading online payment service. As of June, it had lent more than 26 billion yuan (US$4.17 billion) to 130,000 micro enterprises.
An industry expert said online financial services should also collaborate with logistics and payment services.
360buy's next step may be to launch highly profitable but also risky derivative products based on its strong user base.