Fintech And Finance Transformation.The Rise of the Ant Financial Services Group

Essay, 2020

25 Pages, Grade: 1.4


Table of Contents


1.Vision and mission
1.1 Ant’s mission in case vs reality

2. Competitive advantages of Ant Financial

3. Project Ant’s success to foreign markets
3.1 Showcases of ANT’s successful entries in foreign markets / by acquisition or partnerships
3.2 Failure of “going abroad”

4. IPO, when and where

5. Discussion



This ANT case gives a vibrant example of how quickly and unexpectedly business develops in China. This analysis will illustrate the reality of fast paced growth is in the middle kingdom which is above anyone’s imagination/ anticipation.

The paper seeks to give clues to the question; ‘what made ANT successful in China and how –if possible- to replicate such results in other markets.

Keywords: COO, Country of origin bias, Alipay, Chinese IPO, Alibaba, ANT

1.Vision and mission

The mission describes the corporate purpose. This is the raison d’etre of the enterprise and indicates the positive contribution that the company wants to make to customers and /or the society. A mission should not be too narrowly defined, otherwise it limits the company’s competences. Two successful examples:

- Walt Disney’s mission is not “We make cartoons” but themissionof theWalt DisneyCompany is “to entertain, inform and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds and innovative technologies that make ours the world's premier entertainment company” This formulation opened the possibility to open the four Disney amusement parks (among other activities) (‘Disney—Leadership, History, Corporate Social Responsibility’, n.d.).
- “Google’s mission is to organize the world’s information and make it universally accessible and useful(‘Google’s Mission Statement and Vision Statement (An Analysis)—Panmore Institute’, n.d.)

For some companies, the mission also contains part of the strategy for their implementation in addition to the corporate purpose (Meredith E, Forest R, & Fred R, 2014). If the mission statement characterizes what the firm desires or aims to accomplish- ‘its focus’; then, this may be instrumental in constructing a visual of the future.

At this point, it may be useful to stress the differences between; a linguistic point and US and Chinese entities. This fact plays a role as concepts where “mission & vision statements” come from a western if not just US background. Comparative research shows that Chinese companies stress out novelties / “the latest thing”, while their counterparts from the US put the client and their satisfaction at the center of their attention (Quan Lin, Yingchang Huang, Ruojin Zhu, & Yue Zhang, 2019).

The same research highlights that Chinese companies’ mission statements are influenced by government’s ideas of strategy, rather than focusing on the real strategic needs of the company. So, it is quite common to see the words; “country” and “society” in a Chinese mission statement but are less frequently seen in American statements.

1.1 Ant’s mission in case vs reality

It is notable that the mission/vision of ANT was changed from what was published in 2017 “Bring small and beautiful changes to the world” to a 2019 version “Bring the world equal opportunities” and further “Ant Financial is dedicated to bringing the world more equal opportunities through building a technology-driven, open ecosystem and working with other financial institutions to support the future financial needs of society.”(‘Ant Financial’, n.d.).

The Chinese version (translated by the author) gives another picture:

Abbildung in dieser Leseprobe nicht enthalten

(茂林之家, 2018)

Some people claim that the inclusion of a business’ aim in the mission statement, results in increased customer expectations and enhances client’s levels of satisfaction (Nwachukwu & Zufan, 2017). From this standpoint, the mission and vision statement of ANT is not focused in the “right direction”.

Research showed that in the 1980s to 1990s companies incorporated more points “must haves” into their mission statement, ranging from 3 to 9 components. These included: self-concept or philosophy and basic technology (Ahmed, Nawaz, Danish, Usman, & Shaukat, 2017).

The same research found that neither one of the screened mission statements contained 9 components.

Besides linguistic differences between Chinese and US statements, it is obvious that also the scope and the number of components have changed over the past 20 years.

Interestingly, ANT and one of Kyrgyzstan’s (country of socialistic roots) mobile network operators share a similarity in mission statements; which is the absence of any reference to financial success (Najimudinova, 2018).

ANT takes a serious pledge to provide services to underserved markets. For example, ANT signed a memorandum in 2018 with the IFC (which is part of the World bank) to help educate 10.000 technical experts from emerging markets (private and also public sector) (Alipay, 2018). It can be assumed that ANT doesn't do this just out of altruistic motives. The cooperation between the IFC and ANT goes back to the year of 2016, when Ant became part of the “World bank group financial access 2020” program. This initiative is meant to give access to 100 million people who have the ability to participate in the global financial market.

Whether ANT is committed to the underserved market just because of humanistic reasons or not, remains a question which this article will revisit after examining the possibility for ANT to replicate its Chinese success in overseas markets.

2. Competitive advantages of Ant Financial

ANT Financial heavily depends on the fact that it is part of a data collecting conglomerate named ALIBABA. The Chinese market basically is shared by a duopoly of Shenzhen based TENCENT (WeChat for example) and Hangzhou based ALIBABA group. Besides the two giants previously mentioned, BAIDU is also among the top players. However, the horizontal and vertical reach of BAIDU is not as far reaching or intimidating as Alibaba and Tencent.

These two firms basically battle from online games, to food delivery, taxi hailing services to interesting applications like DINGDING. DingDing is a communication platform through which classes and news related classes (grades for example) are managed, companies are even able to manage their attendance with DingDing too. In essence both tech giants know almost everything about a consumer (from traveling to food preferences, application for holiday leave etc.), which creates a formidable database which entities like ANT can use data to estimate credit risks or offer tailored financial solutions.

At some point in time, China was an underserved financial market, where ANT among others took advantage to gain access to millions of Alipay clients and offered them opportunities to invest small amounts of money (so called left over treasure) while feeding bigger funds with the investments, for example Yue’E Bao which ‘stood at USD262 Billion at some point’ (Appell, 2018). ANT in China has no physical presence, meaning retail banking outlets, so they are able to operate at much lower costs; for example, they were able to cut some costs by a staggering 90% (front load fee for example) (Appell, 2018).

This comparative advantage of course only works on the home turf (China mainland) or in markets which are equally less regulated (as China was in the beginning or during e-commerce development). So, in a nutshell ANT has had a brilliant and comet-like start due to missing regulation frameworks and a population that takes little interest in data privacy (compared to Europe for example). As recently as 2018, a consumer protection group in China found out that more than 90 percent of the apps collect more data than they should / are allowed to (‘Attitudes to data privacy changing in China—PrivSec Report’, n.d.).

Such news would lead to a public outcry (one should remember the data breach issues of Facebook or the stories related to Cambridge Analytica (‘How Cambridge Analytica exploited Facebook users’ data, and why it’s a big deal | South China Morning Post’, n.d.) ). The fact that ANT has created a sub-brand named ZOLOZ is responsible for collecting biometric data and offering identity checking services. This may raise an eyebrow, given the recent discussion on cybersecurity and the trustworthiness of Chinese entities (one might think about Hawaii’s worldwide battle to gain confidence for their 5G pitches).

In contrast to the Chinese market, PAYPAL had to apply across different states for financial licenses (Chorzempa, 2019), which gives an idea how freely ANT and others could move and grow in their home markets, while their western competitors had to face heavily regulated markets that were less welcoming and more demanding in sense of data privacy for example.

ANT’s strategy to stay competitive is rather “basic”. Basic here stands for:

-Block chain
-Artificial intelligence
- Security
-IOT (internet of things)
- and cloud computing (, n.d.)

A concrete but a funny example of how ANT is using block chain technology is to trace imported products such as food. The previously mentioned ZOLOZ sub-branch is making use of cloud computing technologies and so on. In short, ANT along with the help of new technologies takes the existing vast amounts of data to the next level in order to stay competitive. One may wonder where all this data could be used in a blink of an eye once the so called quantum computer become more widely used (‘China’s race for the mother of all supercomputers just got more crowded | South China Morning Post’, n.d.).

3. Project Ant’s success to foreign markets

For whether or not the undisputable (ignoring the huge financial loss ANT has piled up for a moment) success of ANT financial is replicable in foreign markets, it is believed that two factors play key factors here:

1) How regulated the market is in comparison to China
2) In what kind of business ANT is trying to succeed abroad.

In the year 2017 more than 3.2 million tourists from China mainland made “landfall” in the United States. In order to make the tourist experience smooth and convenient more and more outlets and taxis across the states accepted Alipay. This seems to be a “niche market entry” as it is aimed to cater the needs of Chinese tourists (roughly 500 million Chinese do have an ALIPAY account) without impacting the financial market in the US at all. Interestingly, potential American competitors do not believe ANT Financial can copy and paste their Chinese success simply because of the complicated regulations in the US. Moreover, acquiring investments by having local consumers buy into the products provided by a Chinese company pose a huge challenge (as it will be shown later when we introduce the country of origin bias) (Wack, 2019).

It is best to introduce cases where ANT was successful to get a foothold in foreign markets and where they failed / were forced to pull out.

3.1 Showcases of ANT’s successful entries in foreign markets / by acquisition or partnerships

WorldFirst is a UK based company that offers virtual accounts and will be led by its founder Mr. Quin even after the full acquisition by ANT (‘Fintech Acquisition’, 2019). It is noteworthy that WorldFirst decided to pull out of the US market in order to pave the way for the acquisition by ANT in leu of the failed MoneyGram deal (see later under b) (‘Ant Financial completes acquisition of WorldFirst’, 2019).

Together with Ethihad Aviation, ANT brought their services to new heights in 2017. In that year both the holding (Alibaba) and Ant itself signed a memorandum of understanding. This gave Ant access to potential Chinese customers by gaining access to their vast data base. While the MoU is intentionally left blurry, it is still obvious that Ant and an airline created a win-win situation where access to data is given in order to enlarge traffic and understanding of ANT’s target marketstrategies (‘Etihad, Alibaba, ANT sign MoU to enhance logistics – Punch Newspapers’, n.d.).

Another example of how ANT is trying to get a foothold abroad is the 2019 announced collaboration with one of the biggest US drugstore chains ‘Walgreens’. The target is again Chinese tourists visiting the states (‘Walgreens expands Alipay acceptance in deal with Ant Financial’, 2019). With the newly signed agreement more than 7000 outlets across the states are offering a “Chinese payment experience” (‘Walgreens aligns with Alipay to serve Chinese shoppers’, 2019). Again, it can be assumed that this “deal” didn't meet a lot of resistance from regulators nor did it get a lot of media coverage. This is another way of showcasing how ANT is not replicating its Chinese success story, but with the help of larger local players gain access to a new (niche) market.

ANT saw an investment opportunity in 2016 to bid for the startup EyeVerify which is in a different sector but same market. EyeVerify is an advanced authentication system which will now be used by Alipay. The transaction saw some headwind , which included a “forced” name change and other actions to pacify regulators (‘EyeVerify announces name change, new product offering in Asia’, n.d.). At first glance, ANT is seen to be “just buying technology” but in the long-term, hopes to gain trust and acceptance outside China.


Excerpt out of 25 pages


Fintech And Finance Transformation.The Rise of the Ant Financial Services Group
International School of Management, Paris Campus
Catalog Number
ISBN (eBook)
ISBN (Book)
Country of origin bias, Alipay, Chinese IPO, Alibaba, ANT, China fintech
Quote paper
Guenther Klein (Author), 2020, Fintech And Finance Transformation.The Rise of the Ant Financial Services Group, Munich, GRIN Verlag,


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