TikTok’s parent ByteDance has established a factoring service in Sanya, in the Hainan province, state-owned media outlet china.com.cn reported on Thursday.
The subsidiary, called Zitiao Commercial Factoring Company, will offer financing, collect accounts receivables and provide guarantees, to improve the efficiency of trade settlement and reduce transaction risks.
“It signals that ByteDance is laying the building blocks for its fintech segment,” Ke Yan, lead analyst at DZT Research, told KrASIA on Friday, adding that the firm could be very helpful for ByteDance once the company decides to offer micro loans.
ByteDance has been eyeing the finance sector before. The company’s attempt to establish a micro loan company in the Ningxia Hui autonomous region failed in 2017. It unveiled a lending app called Manfen in 2019 on a trial basis, but a search on the Xiaomi app store on Friday showed that it is not available for download for unspecified reasons. The firm finally gained an online payment license by acquiring a Wuhan-based company in the third quarter of 2020.
“ByteDance can leverage on the factoring firm to provide capital for its upstream and downstream companies to boost the healthy development of the company’s entire ecosystem,” said Zhang Yu, an analyst with iResearch.
ByteDance, which owns China’s largest short-video platform Douyin, as well as Dali Education and the medical app Xiaohe, declined to comment when contacted by KrASIA.