Alibaba will launch a fund that allows customers to invest in entertainment products as part of its bid to expand into innovative finance

April 11, 2014 Leave a comment

Alibaba introduces crowdfunding entertainment product

Staff Reporter

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2014-03-29

A smartphone user in Fuzhou checks out the Yulebao platform, March 27. (Photo/CNS)

China’s Alibaba Group Holding, the world’s biggest e-commerce company, announced on March 27 that it will launch a fund that allows customers to invest in entertainment products as part of its bid to expand into innovative finance.

Alibaba used Sina Weibo, a microblogging service in China, to announce its latest push into online finance — a form of crowdfunding for Chinese movies. Investors were offered an expected annual interest rate of 7% for putting as little as 100 yuan (US$16) in the fund using their smartphone.

The funds will then be invested in film, television programs and online gaming projects through insurance and wealth management products offered by Guohua Life, a Shanghai-based life insurance company.

The investment product, called Yulebao, which translates to “Entertainment Treasure” in English, is being marketed as a way for ordinary Chinese to play a minor role as a film producer.

Alibaba stated that investors could suggest what films should be made and who should direct and star in them.

Some people are of the view that Yulebao was designed to cater to the investment preferences of young people, while others think the launch of the product is a sign of Alibaba founder Jack Ma’s bid to expand into the entertainment sector, the Beijing-based Economic Observer reported.

The report also stated that Ma was perhaps looking to challenge the traditional financial industry and financial supervisory regulators.

The launch is being interpreted by the paper as Ma’s counterstrike against regulators, who recently imposed limits on transactions involving the Alipay Yu’ebao fund launched by the group. Yulebao was unveiled just two days after four major Chinese state banks said they would impose a limit on the amount depositors could transfer into online products through fast payment services-actions that drew criticism from Ma.

The move to curtail the amount transferred over mobile-payment services has the potential to hurt the multibillion-dollar business of companies, such as the Alibaba Group, which have released third-party payment and investment products for smartphone users.

Zhou Xiaochuan, the governor of the People’s Bank of China, said earlier this month that regulators did not intend to shut down funds, such as Yu’ebao, but changes introduced in their supervision were in preparation for better supervision.

“Financial business on the internet is a new thing, so the current policy, supervision and coordination is not sufficient to cope with it,” he said.

 

Filed under Macro Trends, TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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