China's leading search engine Baidu launched its first online wealth management platform Baifa in late October 2013. The biggest online search company in the country is moving away from its advertising business to compete with Alibaba and Tencent Holdings in the financial sector. [Photo / icpress.cn]

The sector is the latest battlefield for dot-com companies with online payments booming in the world's second-largest economy, reports Meng Jing

Yang Qian, a retired woman in South China's Guangdong province, started a new hobby after spending 22,000 yuan ($3,600) to buy into Yu'E Bao, a fund product co-developed in October by Alipay, the online payments provider arm of Alibaba Group Holding Ltd, and Tian Hong Asset Management Co.

Each morning, the 55-year-old checks her Alipay account through an app on her mobile phone and finds that about 2.87 yuan have been added to it. Despite the small amount, Yang said she is filled with joy every time she finds the new earnings.

As a typical fan of Yu'E Bao - which is designed to make it easy for Internet users to invest idle cash from their Alipay accounts and earn a higher interest rate than what traditional bank savings accounts offer - Yang's enthusiasm is what makes the concept such a success in China and has made "Internet finance" a new catchphrase in the business world.

According to Tian Hong Asset Management, Yu'E Bao has become the largest money market fund in China within four months of launching in mid-June.

As of Nov 11, Yu'E Bao, which translates to "leftover treasure", had 100 billion yuan in assets under management and more than 30 million customers, Tian Hong said.

It seems no one wants to leave his or her leftover treasure behind. So, many companies have rushed to follow e-commerce king Alibaba by providing similar financial offerings.

Along with Alibaba - whose Taobao marketplace recently received a no-objection letter from the securities regulator to help companies sell fund products online - Baidu Inc, China's biggest Internet search provider, also has moved into financial services, launching an online finance product called Baifa in late October.

In fact, Baifa's rumored annual yield of 8 percent attracted so many prospective customers that Baidu reported that 1 billion yuan worth of the financial products were sold within five hours of the launch.

JD, the platform of online retail giant Jingdong Inc, also has made Internet finance one of the main engines in driving the company's future growth.

JD wouldn't reveal the details of its Internet finance products as it is in the process of getting them licensed, but the company has shown its ambition by co-founding in August the Zhongguancun Internet Finance Association, the industry's first national group, with more than 30 other Internet finance players.

Just as the Internet has changed the landscape of retail business around the world, insiders believe it will reshape China's finance sector.

Yuan Leiming, an executive with Alibaba Small Micro Finance Services Group, said the traditional finance sector relies largely on financial outlets such as banks to provide services to customers.

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