Analysis of the Yu Ebao and Its Impact on the Financial Sector

Xiaojuan Zhang


In June 13, 2013, Alipaycombined Celestial fund jointly launched the Yu Ebao, Yu Ebao is a kind offinancial value-added service on Alipay platform, users can transfer balancefrom Alipay account to Yu Ebao, is recognized that is seen as a particular fundto buy financial products, to obtain a relatively high income, but also thefund in Yu Ebao is readily available for online shopping and Alipay transferand so on.This simple Internet financial model is highly welcomed in Chinabecause of its more than 10 times higher rates compared with the Saving Bankinterest rates. According to China Securities News, Yu Ebao has attracted morethan 400 billion with more than 61 million users by March 15, 2014. This explosivegrowth has caused a hot topic in society. The paper analyzes what is Yu Ebao, thereason why Yu Ebao could develop so rapidly and its potentials, the advantagesand disadvantages of Yu Ebao, and whether it will be a powerful competitor tothe traditional financial sector will be discussed as well.

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World Journal of Social Science     ISSN 2329-9347 (Print)  ISSN 2329-9355 (Online)

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