Away from the politics of the G20 Summit last week there was news in Hangzhou that Ant Financial – affiliated to Alibaba, and the owner of the Alipay payments service that’s headquartered in that city – will become a cornerstone investor in Yum China, a new spin-out from Yum Brands.
Ant is putting $50 million into the deal and will be joined by China-based fund Primavera Capital, which will pony up $410 million. Yum plans to spin-off the remainder of its China business in a New York listing later this year.
The investment in the fast food franchise is part of the broader push into “online to offline” sales in which Alibaba exploits its mobile payment tools for shopping, travel and dining. For Yum, the plan is to incorporate the popular Alipay payment services across KFC, Taco Bell and Pizza Hut restaurants, and use them to develop consumer loyalty and other sales initiatives.The two companies started working together last July when KFC began accepting Alipay at its 5,000 stores across China. Now the two will add a flagship store on Tmall, Alibaba’s popular sales platform, at which customers can purchase coupons for meals.
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