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Users of Yu'ebao breaks 100 mln in Q2
Last Updated: 2014-07-02 19:54 | crienglish.com
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China's internet financing product Yu'ebao, jointly provided by Alibaba and Tianhong Asset Management Co. Ltd, has funded over 57.4 billion yuan (approx. 9.2 billion U.S. dollars) in the second quarter of 2014, showing a slight growth than the first quarter. The number of users has also surpassed 100 million.

Based on Tianhong's report, the average age of users has slightly increased to 29 years old, as older generations are also attracted to the product. However, young users still take a larger proportion of 76-percent.

However, amid positive growth numbers, Yu'ebao has shown a steady decline of its interest rates, from the intriguing 6.7-percent to the current 4-percent. It is estimated that the number will decrease below 4-percent in August.

Facing the steady decline on interest rates, Alibaba has provided side-products to boost revenues. For instance, it collaborated with telecommunication companies to offer free applications of popular handsets to its users. Tianhong also says more similar services will be available in the future.

Wu Xiaoling, head of the School of Finance in Tsinghua University, thinks Yu'ebao has reached its limits. With developed financing systems and billions of accounts, traditional finance institutions will provide similar products that have better credibility than Yu'ebao.

Yu'ebao is now the largest monetary fund in China and the fourth largest globally. The product offers more interests than deposits in banks, which has attracted many people to put money into it.

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