Bloomberg has such a lockdown on the lucrative financial data market that some clients are desperate to wean themselves off of its terminals. While few American companies have brought a formidable competitor to market, China’s largest e-commerce company might.
Today Alibaba announced a 1.2 billion yuan ($193.6 million) investment in China Business Network, a subsidiary of the media conglomerate Shanghai Media Group, which owns TV, radio, print, and online properties. The deal is the first step toward Alibaba creating a serious challenge to Bloomberg in financial and economic data, one person briefed on the deal told Quartz—a challenge the Chinese government has been calling for for years.
Alibaba and CBN have already quietly paired up through a third company, Gildata. In April 2014, Alibaba spent 3.3 billion yuan (US$628 million) to acquire Hundsun Technologies, a provider of financial software and services (link in Chinese). In November, Hundsun announced that its subsidiary Shanghai Gildata, which provides data and terminals to businesses, received a 390 million yuan (US$63 million) investment from China Business Network, Alibaba finance affiliate Ant Financial, and others.
In addition to its terminal business, Gildata now provides financial data for CBN’s TV channel and various Alibaba properties, including the stock ranking section of Alipay Wallet and a performance ranking section for Taobao Licai, which lets Chinese consumers invest in money market funds.
Alibaba itself is a data gold mine for companies hoping to sell into the world’s second largest economy—founder Jack Ma has even described it as a “data-sharing company.“ Through its e-commerce properties, it knows what hundreds of millions of Chinese consumers and millions of businesses buy and sell. Through Alipay, Yue’bao, and Taobao Licai, it knows how these people and businesses manage their money. It even knows about the apps people use, and what websites they visit.
Such data helps Alibaba make money selling buttons and bras online. But it could also help traders and investors in their decision-making. The new deal hopes to “level the playing field,” Alibaba said in a statement. “By giving a greater number of Chinese enterprises access to precious financial data that can be easily mined and analyzed for actionable investment and business decisions, this platform is expected to help these enterprises scale and expand their businesses.”
Certainly there’s a growing market to tap. China’s spending on financial data grew 16.7 percent from 2013 to 2014, according to research firm IDC, well above the estimated global increase of 4 percent.
Meanwhile Bloomberg has earned a particularly high level of suspicion from the Chinese government. In June 2012 it published an investigative report on now-president Xi Jinping’s family wealth, a taboo subject in China. Soon after, Bloomberg News was censored on the mainland, and sales of Bloomberg terminals slumped. The company’s snooping scandal in 2013 did not help matters, and the state newspaper Xinhua called for investment in a local alternative to Bloomberg.
If Alibaba does challenge Bloomberg, it will no doubt enjoy better government relations than its rival. But the trump card could ultimately be quality. Financial data is useless if it isn’t timely and accurate.