Ant Financial, the fintech arm of e-commerce firm Alibaba, has acquired a significant stake in Vietnamese eWallet service provider eMonkey.
Ant Financial has not acquired a controlling stake in eMonkey but will provide technical support to it. The deal with eMonkey is Ant Financial’s eighth international strategic investment.
Vietnam has recorded one of the highest growth rates in the e-commerce market in Asia. The high growth rate is attributed to a quarter of the Vietnamese population being under the age of 25 years.
eMonkey is the eWallet arm of Vietnamese fintech company M-Pay Trade. It has an operating license from the State Bank of Vietnam and has formed partnerships with the most prominent banks and telecom companies in the country. Ant Financial chose eMonkey because it had all the clearances and was already operating in the country.
The eWallet sector has a lot of players in Vietnam with Standard Chartered-backed local eWallet Momo leading the pack. The deal with Alibaba will give eMonkey access to resources, which will help it compete better.
The deal has not been officially announced as it was feared that current maritime tensions between China and Vietnam and China’s backing of Special Economic Zones would result in opposition to the deal in Vietnam.
Commenting on the secrecy about the deal Nick Marro, global trade lead at the Economist Intelligence Unit said, “It makes sense that Chinese investors-including those who see the Vietnamese market as having a ton of consumer potential, as well as those diversifying into that country as part of the trade war-may, want to keep a low profile.”