Alibaba Widens Non-Traditional Consumer Credit Ratings


Jack Ma, founder of Alibaba, controls Ant Financial Services. It has unveiled a new business, Sesame Credit Management.

In what is becoming a fast business disruption to traditional credit ratings–credit scores–Alibaba, the largest e-commerce site in the world with over 100 million customers each day, will tap into its huge databank of consumer records to provide credit ratings on consumers.

Why? To mine the millions of Chinese who lack credit histories but whose cultural habits are notoriously frugal and with household savings among the highest in the world, according to NY Times reporter Neil Gough (

In the U.S. online lending market, lenders such as Affirm are using personal behavior and online credit histories in order to compile a credit profile for prospective borrowers.  The huge market of immigrants and students who typically lack traditional credit histories or scores makes this niche potentially very profitable.

Alibaba puts that trend now in the mainstream.  The China online retail giant will offer the credit through its subsidiary Ant Financial Services controlled by Mr. Ma and the credit-scoring firm Sesame Credit Management Group who will rely on the online data for its scoring.

China does not have significant credit rating systems like FICO scores and Chinese consumers typically don’t use credit cards.  With more than 1.3 billion people, only 436 million have or use credit cards, thereby short-circuiting the huge credit card market available to U.S. e-commerce sites, such as

Other uses can be gleaned from such online data, such as hiring decisions, tenant screening, and even activity

Aibaba’s credit-scoring firms will have access to more than 300 million real-name registered users, nearly a quarter of China’s population.

This is a win-win opportunity for Alibaba, Chinese consumers, and the government.  It will help spur the development of a healthy economic and social environment, said Ant’s chief operating officer.  And it will be a boon for domestic economic development, one of the stated aims of President Xi Jingping.

Jack Ma was interviewed by Charlie Rose and showed every bit, if not more, entrepreneurial savvy, not to mention humility, humor, and savvy, than Amazon’s Jeff Bezos.  Here’s that interview:




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