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Submitted 10/12/20, 1st revision 14/01/21, 2nd revision 23/02/21, accepted 23/03/21
Abstract:
Purpose: The objective of the paper is to present Chinese Big Tech companies and present their increasing activity on domestic financial sector.
Design/Methodology/Approach: For the purpose of the paper, the following methods have been applied, critical analysis of literature and research papers as well as descriptive method and comparative analysis of presented data.
Findings: Based on the above-mentioned methodology methods, Big Tech can be determined that Chinese Big Tech companies have significant potential to impact not only Chinese domestic financial sector, but also the global financial sector. What is more, COVID-19 fastened several trends undergoing on the banking sector (such as digital transformation) that Chinese financial sector is relying upon.
Practical Implications: During COVID-19, Chinese Big Tech companies outperformed key players in Chinese domestic financial sector in key financial metrics such as market capitalization, revenue increase, net income.
Originality/value: Chinese Big Tech companies have stronger foothold on the domestic financial markets rather than their counterparts in USA (Amazon, Apple, Google).
Keywords: Big Tech, Chinese banking sector, digital.
JEL classification: E42, G21, O14.
Paper Type: Research study.
1. Introduction
In Q3 2020, Ant Financial - large Chinese financial technology company - was expected to have the largest Initial Public Offering (IPO) up to date (Horowitz and Pham, 2020). In dual-listing share sale on both Hong Kong and Shanghai stock exchanges Ant Financial was on track to raise 34.5 billion USD, beating IPO of Saudi Aramco in 2019 (raised 29.4 billion USD) and Alibaba in 2014 (raised 25 billion USD) (Pham, 2020). What is more, retail demand for shares was at 3 trillion USD only in China. However, due to several regulatory issues in Mainland China, IPO was suspended and Alibaba company that owns one third stake of shares in Ant Financial, lost 60 billion USD in market capitalization (Wilhelm, 2020).
In spite of IPO suspension, it was a clear indication that financial technology companies and Big Tech companies such as Alibaba, are attracting significant attention not only in USA and Western European countries, but also in China - the second biggest economy worldwide in terms of GDP (London, 2018). Key players in Chinese economy are companies operating in financial sector (banking, insurance) and technology...