Ant Group’s profits have dropped 19% as the Chinese FinTech expands its digital wallet offering.
A report Tuesday (May 14) by Bloomberg News breaks down the company’s earnings, which showed Ant contributing 2.57 billion yuan ($355 million) of profit to Alibaba, which holds a one-third stake in the company.
Based on that stake and Bloomberg’s calculations, that comes to an estimated 7.7 billion yuan in profit for the December quarter. The decline was considerably lower than the 92% decline in earnings for the prior quarter, the result of an investment loss.
The Bloomberg report notes that Ant has been expanding its business overseas to offset slowing growth at home, with the company collaborating with at least 25 eWallet platforms for cross-border payments in Southeast Asia and Europe.
Earlier this month, Ant Group said it was exploring ways to expand the use of its Alipay+ payments product. Introduced in 2020, Alipay+ lets visitors to China use apps from their home countries to make payments.
“What we found is that people want to use their home e-wallets when they travel abroad. So they don’t want to have to load their card into another app that they don’t know as well,” Douglas Feagin, senior vice president of Ant Group, told CNBC.
“We see a huge opportunity for expansion and the relatively broad coverage we have in Asia — we [would] like to replicate in places like the Middle East, Latam and Europe. People from all these regions are going to other regions, so a big opportunity to expand.”
The company also recently launched a cross-border payments initiative designed to boost Hong Kong’s tourism and commerce sector.
The platform allows for transactions for users of 14 overseas mobile wallets and bank apps from nine countries and regions, among them Mongolia, Malaysia, Macau, Italy and Singapore, making sure that these platforms, much like Alipay in mainland China, are now accepted by over 90% of local merchants in Hong Kong.
“By enabling users to conduct transactions through their preferred home apps, this integration aims to streamline payment processes, enhance operational efficiency, and elevate service standards in Hong Kong’s retail landscape,” PYMNTS wrote.
The company in April launched a series of “International Consumer Friendly Zones” in China, working with local merchants, tourism sites and commercial districts to improve international visitors’ experience and foster more business for local merchants in the country’s main tourist destination cities.
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