Investor Presentaiton
Example 2 (Yu'E Bao)
Before the internet giant Alibaba entered the money market funds (MMF)
business in June 2013, the MMF sector was small and did not attract many retail
investors.
After Alibaba acquired about 50% of the MMF provider Tian Hong and offered
MMF types of products through YuE Bao, these investment products sold online
gained huge popularity: AUM of RMB500 billion by the end of February 2014.
Since Chinese consumers and investors are very familiar with Alibaba and its
online market place, they might implicitly assume that in case of default Alibaba
will bail out the failed investments products because of reputational concerns.
Investors have information about the financial strength of Alibaba that it is able
to rescue any failed product although legally Alibaba does not provide any credit
guarantee.View entire presentation