Jack Ma’s Ant rebranded some credit offerings as part of overhaul

Before Beijing cut its wings, Ant offered consumer-lending services through its payments and lifestyle app Alipay that were widely popular among Chinese consumers and small businesses. The products later became one of the key reasons for Chinese regulators to downsize their blockbuster initial public offering just two days before the scheduled listing in November last year.

Ant, which is 33% owned by Alibaba Group Holding Ltd., has since been forced to reform its businesses in accordance with directives set by regulators including the People’s Bank of China. As part of the overhaul, Ant founded a new consumer-finance company in June, along with several other companies, and began to fold the credit business into the new entity.

Ant offers Hubei, which means “just spend” in Mandarin, a virtual credit card-like service, and short-term unsecured loans under the banner of Jibei, which means “just borrow.” The two products combined were used by nearly half a billion people in China, and accounted for about a fifth of the country’s outstanding short-term consumer debt as of June last year, the latest data available.

Ant financed only 2% of the 1.73 trillion yuan of debt, equivalent to $271 billion, with the remainder being financed by banks, trust companies and asset-backed securities as of June 2020.

Beginning this month, Ant began to differentiate Hubei and Jibei products based on the source of funding, as required by rules governing Ant’s new consumer-credit company.

Only loans funded in whole or in part by Ant will continue to bear the brand names of Huabei and Jiebei. Consumer-credit services financed by other financial institutions would be called Xinyongou, or “buy with credit.” Similarly, consumer loans funded by other financial institutions would be called Xinyongdai, or “credit loans”.

Ant said in a letter to users that “brand differentiation will increase to cover more users” and recommended users to prefer Xinyongou over Hubei because the former has a larger credit line.