Ant Group backed MYbank: People, planet, profit in rural China

• Main Authors: WANG, Heli, BHATTACHARYA, Lipika
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2022
• Subjects: strategy; corporate social responsibility; creating shared value; business and society; Microfinance; Agribusiness; Asian Studies; Organizational Behavior and Theory; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/432; https://smu.sharepoint.com/sites/admin/CMP/cases/SMU-22-BATCH%20%5BPDF-Pic%5D/SMU-22-0026%20%5BMYbank%5D/SMU-22-0026%20%5BMYbank%5D.pdf?CT=1667814068434&OR=ItemsView
• Institution: Singapore Management University

This case talks about the 3P (People Planet Profit) strategies of Ant Group backed MYbank, which was established as an online bank in China, as part of Alibaba’s ecosystem, with the vision of providing inclusive finance services to SMEs and farmers in rural China. In April 2022, however, the Chinese economy was grappling with the after effects of the Covid-19 pandemic and macro-economic trends had predicted slower growth for the year. The aggregate net profit of China’s commercial banks was expected to grow at around 10% in 2022, compared to 12.6% in 2021. However, despite the challenges, there was optimism at MYbank as the company had reported a year-on-year growth of 31.6% for the first quarter of 2022, with loans and advances for the first quarter totalling a staggering US$ 27 billion. Banking had traditionally always paid more attention to high-net-worth individuals, fewer accounts and more one-on-one relationships. MYbank however, had focussed on technology, innovation, quick transactions, large volume of low-income consumers, and lower operational costs to create a sustainable business model. However, ripple effects of the pandemic were plaguing its target customer segment – SMEs and farmers from low-income backgrounds in rural China - who were grappling with economic uncertainties. Could MYbank continue to adopt a low margin, high volume model like assembly line businesses to target large swathes of the rural population and generate profit in the process? Could MYbank become the McDonald’s of digital banking in China? The case helps students analyse (1) various aspects of corporate social responsibility (CSR), strategic CSR and its significance in building a sustainable and competitive business (2) significance of Inclusive Finance in Economic Development of China (3) 3P’s of sustainability, and its significance to businesses in creating economic value.