What Jack Ma’s Collaborations Mean for the Philippine Fintech Scene
And how local fintech start-ups are reacting
PHOTO CREDIT: Getty Images
When Alibaba Group founder and executive chairman Jack Ma visited the Philippines last October, he made no qualms about expressing his company’s efforts to boost e-commerce in the country. After all, e-commerce only captured 0.5% of the total market in the Philippines last 2015, according to a Google Temasek study.
Last year, the Alibaba Group spent $1 billion to gain a controlling stake at Lazada, a Southeast Asian e-commerce platform with considerable presence in the Philippines. Last June, it was reported that Alibaba would invest an additional $1 billion to boost its stake to 83%.
Early this year, Alibaba subsidiary Ant Financial entered into a joint venture with Globe Telecom and the latter's parent company, Ayala Corporation, through a strategic investment in Globe's fintech arm Mynt.
What do these developments mean for the e-commerce scene in the Philippines?
These fintech start-up founders and analysts weigh in:
Pushing for a cashless economy
Asim Haneef, founder and CEO of PaidUp, a mobile payments app that helps users shop for food, says Ma’s push for cashless transactions is a good development.
“He has a unique vision and insight as one of the world’s most successful e-commerce founders, and with all his travel and experience, if he feels the Philippines can be number one in the world, that’s really saying something,” says Haneef. “Cash is inherently a problem, and that’s something we see everyday…so his words on needing the Philippines to quickly become a cashless society are right on time — along with his warnings on the need to improve the speed of Internet — a factor holding all progress back.”
Mikko Perez, founder and CEO of Ayannah, a provider of digital commerce and online payments, says the Philippines cannot remain stuck in a cash economy and that the entry of a fintech unicorn such as Ant Financial should accelerate that change.
“I believe Ant Financial's collaboration with the Ayala-Globe Telecom group will spur the adoption of new and innovative digital payment technologies that are badly needed to increase financial inclusion. 87% of the population remains unbanked. Only 1% of consumer transactions are digital,” Perez says.
Collaboration, not competition
Perez adds his company can work with new players such as Ant Financial or Mynt since Ayannah provides the full stack of digital financial services, from payments, to commerce, and as well as analytics.
Ray Refundo, founder and CEO of Qwikwire, a cross-border payment system for property developers, says mobile wallets will be affected by Ma’s collaborations in the Philippines. Because they will have an opportunity to work with Mynt, “It’s actually good for us,” he says.
Jonha Richman, investor at JJ Richman, says Jack Ma is first and foremost looking to help build the Asian region, which is why all the elements needed to ensure that e-commerce succeeds must be in place, including fast and reliable Internet and collaboration with telco companies.
“He’s in it for the long game and instead of crushing competitors, he prefers to work with the key players in the region,” she says.