helloPay Group, a payment platform for e-commerce firm Lazada has merged with Ant Financial Services Group‘s mobile and online payment platform Alipay, an expected consolidation move after Alibaba’s buy of South East Asia-focused e-commerce major Lazada last year.
Following the merger, helloPay will be re-branded as Alipay starting Wednesday in each of the markets that helloPay operates — Singapore, Malaysia, Indonesia and Philippines, according to a media release issued on Wednesday.
However, all helloPay’s features and services will remain unchanged, with the re-branded helloPay service separate from Alipay app, which has over 450 million users in China and is operated by Ant Financial, a related company of Alibaba Group.
“There will be no impact to helloPay’s users and payment partners. We will continue to innovate and provide users with safe, fast and convenient payment services,” said Douglas Feagin, SVP of Ant Financial.
The consolidation of the two payments infrastructure follows the $1 billion acquisition of e-commerce platform Lazada by Jack Ma’s Alibaba Group last year. The move is also a part of a larger strategy aimed at controlling significant elements of the customer life-cycle as the website grows in the region and draws on its experience with online banking in China.
Post-merger, 2014-founded helloPay’s team will become part of Ant Financial, which will be operating the re-branded helloPay. Ant Financial has proven expertise in delivering secure and convenient payment platform to a large and growing mobile audience in China. The re-branded helloPay will continue to provide payment services on the Lazada platform across Southeast Asia.
Through the Alipay app, users can make use of an array of services ranging from ride-hailing to booking hotels, paying utility bills and buying movie tickets.
In fact, the merger of helloPay and Alipay apart from a natural consolidation also reflects a long-term strategy on the part of Alibaba, which is competing with Amazon in the region’s growth markets. The entry into Southeast Asia’s e-commerce space has seen it accelerating its consolidation.
Smaller operators are unable to expand operations in the face of increasing competition and logistics costs which Alibaba has the resources and cash to overcome. This is reflected in Lazada’s acquisition of online grocer Redmart last year, soon after the Alibaba-Lazada deal.
Meanwhile, leveraging Alipay and its e-commerce business, Alibaba established Alifinance in 2011 to provide microloans to vendors on Taobao, Alibaba’s online platform for micro, small & medium enterprises (MSMEs). It is notable by mid-2014, it had dispensed over $30 billion in loans.
Additionally, it builds up the competitive advantage of Alibaba and allows Ant Financial to further grow. The merger will see it gain access to greater volumes of data regarding consumer spending habits in Southeast Asia in the form of shopping and payment data.
In a July 2016 interaction with DEALSTREETASIA, Piyush Gupta, Group CEO of DBS Bank, Southeast Asia’s largest lender, had said: “Alibaba is the biggest payment company in the world. They transfer more money through Alipay than anybody..any banks. They do hundreds of millions of transactions. They are one of the fastest fund gatherers in the world. They hit a hundred billion dollars in less than a year with zero branches – No branch, hundred billion dollars.”
He had further added: “DBS took 50 years to get hundred billion dollars. They did it in 12 months. They have the fastest growing loan book. They grew their SME and consumer lending book by $12 billion last year. Their cost of credit is lower than any bank. And guess how many branches they have? Zero. If Alibaba can do that, why is it not going to happen to the rest of the industry. It has to happen.”