With an insurance brokerage license now under its belt, retail giant Suning Commerce (02024.CN) has made it clear that aims to leverage its huge customer base to transform itself into a financial services and online sales conglomerate.
Suning can now introduce, recommend and pick insurance products for its customers. In addition to marketing insurance products, the newly founded insurance sales company will also be allowed to collect insurance premiums as well as validate and settle claims.
Yan Ming, general manager of financial risk department at Huatai Insurance Agency, told China News that Suning’s insurance business can be synergistic with the firm’s core appliances retailing operation.
Suning Commerce has specific online retail platforms, like Red Baby for baby & mother care products, and Binggo for cosmetics & skin care products. By gathering users from these platforms, Suning would be able to tailor specific and diverse insurance products for its customers, differentiating itself from other players in the segment, Yan noted.
China’s actual insurance premiums reached 1.72 trillion yuan (US$283 billion) last year, representing 11.2 percent growth over the previous year. The market is expected to keep growing in the coming years. Amid this situation, the insurance brokerage license will add to Suning’s portfolio of telecom service license, a courier business license and a potential banking license.
Suning has secured licenses from Ministry of Industry and Information Technology to offer telecom services. Last week, the unit obtained an international express delivery license from the State Post Bureau, which would enable the group to compete with international express delivery players like DHL, UPS and Fedex in China, and also expand to the overseas market.
In the meantime, the group is preparing to make a foray into the banking business as well. Name registration for Suning Bank was approved by the State Administration for Industry and Commerce last September. It is now awaiting an official license.
While competitors are busy partnering with one another to fast-track their expansion, Suning has chosen to go solo in most of its new businesses. While the pieces appear to be falling in place, the key question now is how the group will fulfill its capital needs and whether the business can reach critical scale fast enough.
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