CK Hutchison Holdings (0001) and Ant Financial Services Group, an affiliate of Alibaba Group, are forming a strategic partnership to offer digital payment services in Hong Kong.
Hong Kong tycoon Li Ka-shing’s conglomerate CK Hutchison Holdings and Jack Ma’s Ant Financial Services Group, operator of Alipay, said on Tuesday the two companies were developing a strategic partnership to run mobile payment platform AlipayHK, the Hong Kong Economic Journal reports.
The partnership will be a 50-50 joint venture and will offer a digital wallet under the AlipayHK brand, further integrating online and offline payments.
The joint venture is expected to be completed by the end of 2017, subject to regulatory approval.
CK Hutchison has an extensive consumer network of telecom, retail and public utilities, as well as rich commercial experience in Hong Kong, while Ant Financial has technological expertise in digital payment.
A source familiar with the deal said the joint venture will focus on the Hong Kong market first and, in future, consider whether to enter overseas markets. CK Hutchison already has a global presence through A.S. Watson Group.
“By leveraging CK Hutchison’s extensive market presence and combining its commercial experience with Ant Financial’s technology expertise, we will bring great benefits not only to our telecom, retail, and other customers of the group, but also to all businesses in Hong Kong. This will, in turn, create greater shareholder value,” Canning Fok Kin-ning, co-managing director of CK Hutchison, said in a statement on Tuesday.
Eric Jing, chief executive of Ant Financial, said: “There are millions of people traveling across the Guangdong-Hong Kong-Macau Greater Bay Area every month. Ant Financial is dedicated to bringing digital financial inclusion to the citizens in the region and help them to create a more convenient and productive lifestyle.”
Jing said users will enjoy plenty of benefits from this partnership in the near future.
Last year, the Hong Kong Monetary Authority (HKMA) granted a stored value facility (SVF) license to five e-wallet providers, one of which is Alipay.
When asked whether the AlipayHK service will need approval from the city’s de facto central bank, the HKMA said it does not comment on matters concerning individual organizations.
Emil Chan, chairman of the FinTech Committee of Smart City Consortium, said the strategic partnership can expand the application of digital wallet within two to three years.
Chan said the existing players in the digital wallet market will see fiercer competition, with competing alliances possibly to be formed by different e-wallet service providers in the future.
Francis Fong Po-kiu, founder and honorary chairman of the Hong Kong Association of Interactive Marketing, said Ant Financial has taken a wise move in partnering with CK Hutchison.
CK Hutchison is a multinational conglomerate that has retail operations including ParknShop and A.S. Watsons, shopping malls and parking lots in more than 50 countries.
For CK Hutchison, the partnership can help attract more customers from mainland China.
Chan and Fong expect Jardine Matheson Holdings, which owns the Wellcome supermarket chain, and many restaurants in Hong Kong, will be the next businesses to embrace digital payment.
Translation by Jonathan Chong with additional reporting
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