Chad Ghosn joins the online furniture retailer from Expedia.
60% of Alipay will be offered to new investors, the rest held by employees.
Alibaba Group, the dominant e-commerce company in China, has restructured its Alipay payments arm, a unit that is taking steps to offer investment products and expand Alipay acceptance internationally.
As part of the restructuring, Alibaba will offer 60% of the shares in Alipay’s parent to strategic investors, with the remaining 40% to be owned by Alibaba employees. Alibaba founder and chairman Jack Ma will hold a stake of about 7% in the new entity, Alibaba says. The company being restructured is formally named Zhejiang Alibaba E-Commerce Co. Ltd., but Alibaba refers to it in public document as its Small and Micro Financial Services Group.
Alibaba, which operates the big Chinese online marketplaces Taobao and Tmall, is No. 1 in the Internet Retailer 2013 Asia 500.
Alipay, an online payment service akin to eBay Inc.’s PayPal, is widely used to make purchases in China, principally for making online purchases but also for paying bills and conducting other offline transactions. 800 million Chinese consumers have Alipay accounts, Alibaba says.
Alipay has recently signed up some U.S. e-retailers to accept the Chinese payment system. For example, iHerb Inc., No. 204 in the Internet Retailer Top 500, began accepting Alipay this year, leading to a significant increase insales to China, the e-retailer says.
In another move to expand acceptance, Alipay announced today a deal to make it easier for global airlines, hotels and other travel companies to accept Alipay. The Chinese company has formed an alliance with UATP, a payment network owned by airlines around the world that connects to many travel companies, to enable hotels, railroads, travel agencies to accept Alipay through the UATP Network.
“Alipay is dedicated to meeting the needs of China's vast and growing pool of keen overseas travelers by making it easier for them to pay for air tickets, book hotels, rent cars and make other travel-related purchases online from the world's leading airlines and accredited travel agencies,” says Jingming Li, vice president and chief architect of Alipay International.
Li reports to Lucy Peng, CEO of Alibaba’s Small and Micro Financial Services Group.
In another move into providing financial services to its 800 million registered users, Alibaba received approval last week from the Chinese government to offer investment products on its marketplaces. Seventeen companies have begun offering money market, bond and stock funds through a section of the Taobao marketplace called Licai, which means “financial management” in English.
Alibaba says the Taobao offerings will open up investing to middle-class Chinese consumers. “We want ordinary people to understand that funds management is not something mysterious and the barrier to entry is not high,” says Yuan Leiming, an executive with Alibaba Small and Micro Financial Services Group. “While users are buying their kitchen essentials like oil, salt, sugar and vinegar on Taobao, they can now also manage their finances.”