Baidu to launch online wealth product Baifa at month-end

By Yang Jing Source:Global Times Published: 2013-10-22 23:13:01

Logo of Baidu and China Asset Management Co (ChinaAMC)  Photo: IC

Logo of Baidu and China Asset Management Co (ChinaAMC) Photo: IC

Graphics: GT

Graphics: GT


China's leading search engine Baidu Inc will launch its first online wealth management product Baifa by the end of the month, but it does not guarantee a specific rate of return, a spokesperson from Baidu told the Global Times Tuesday.

Baidu will cooperate with China Asset Management Co Ltd to launch Baifa, which means "folks make a good fortune" in Chinese, on the Baidu platform on October 28, Baidu's spokesperson said.

The minimum investment is just 1 yuan ($0.16), and users of Baifa can withdraw money at any time without penalty.

Baidu was quoted by China Business News Tuesday as saying that the annual fund return target of Baifa is 8 percent.

Eight percent is much higher than the usual profit rate of monetary market funds, which is usually between 4 percent to 5 percent, such as Yu'ebao, Wang Weidong, an analyst from iResearch, told the Global Times Tuesday, noting the number of 8 percent might be just a means of advertising.

Yu'ebao is a wealth management product launched in June by Alipay, China's biggest online payment platform.

If Baidu plans to achieve the target of 8 percent, it may set limits on selling such as the number of buyers and on how much each customer can buy, Wang said.

It is hard to evaluate the profit target because Baidu has not revealed any details about Baifa, such as the specific type of fund or investment product it is, Zhang Meng, an analyst from Analysys International, told the Global Times Tuesday.

However, the Baidu spokesman told the Global Times Tuesday afternoon that Baidu does not guarantee any profit rate.

Financial news website also reported that Baidu said the company neither promised 8 percent as a profit rate or that investors will not make a loss, and that making the guarantee is not allowed by financial regulations.

Many media reports compared Baifa with Yu'ebao which allows users to transfer their balance in their Alipay accounts into a money market fund.

The product attracted millions of users after its launch as it offers an annualized yield of about 4.5 percent, higher than the on-year deposit rate of 3 percent offered by commercial banks.

In the first 18 days, Yu'ebao gained 2.5 million users and raised more than 6.6 billion yuan, data from Alipay showed. Analysts believe it will surpass 100 million yuan by the end of year.

Wang told the Global Times that the search engine Baidu can bring a large number of visits but compared with Yu'ebao, Baifa has a disadvantage of having to attract visitors to become users.

If a visitor wants to buy Baifa, he needs to register an account on Baidu Wallet, which is Baidu's payment product, Wang said, noting the registration procedure is a disadvantage.

Compared with Yu'ebao, Baidu Wallet does not have a lot of users and its application fields are limited, Zhang said.

This means that Baifa has to attract a lot of users through promotions but it would be hard to attract and keep users in this way.

Internet companies such as Alibaba and Baidu are competing in the field of Internet finance, Wang said, because there is a lot of opportunity for further development.

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