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Case #12 - Growing A Global Forest - Ant Financial, Alipay, and Ant Forest

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Case #12: Growing a Global Forest:

Ant Financial, Alipay, and Ant Forest

Group 6

Yuliana Nathania Sutedjo (M10818804)


Pham Tien Trung (M10718813)
Yordy Ng Fung (M10708823)
陳暄尹 Lucia (M10818021)
郭家圻 Justin (M10818007)
張岳愷 Kevin (M10818008)
黃羿維 Dean (M10821020)
汪哲緯 Max (M10821011)

Introduction :
Ant Forest caters to the public's attention to low-carbon environmental protection and other public
welfare activities, and successfully attracts users through games.
Most high-frequency users of mobile payment such as Alipay are people with a certain education level,
and they have a more enthusiastic focus on environmental protection and other public welfare activities.

1. What were Ant Financial’s objectives in starting Ant Forest?

● Increase the frequency of interaction with their users - The tool features of Alipay of
course let users forget to open it, unless they have the requirements and usage scenarios
for monetary transactions. Therefore, Alipay urgently needs to develop the features that
can enhance the user interaction frequency to extend the user's usage scenarios. By using
Ant Forest, users are enthusiastic about how to get energy fast, how to plant trees quickly,
and are interested in tips on how to grow energy. The users of Ant Forest now began to
use Alipay in more scenarios and become their loyal customer (Increase usage frequency)
● Gain reputation by doing CSR - By using Ant Forest, Ant Financial try to encourage
people to pay attention to environmental protection and adopt low-carbon activities on a
daily basis. They want people to feel included in changing the world since every small
actions do matter. By doing good to the society, Ant Financial improve their reputation.
(Ant Forest empowers users)
● Building trust on Alipay’s platform - Ant Financial stands firm in their commitment to
plant a real tree for each completed virtual one in the platform. By converting virtual
trees into real life trees, not only gives users the power and perception that they can make
an positive impact on the world, but also helps build trust toward Alipay as it such
actions show alignment with Alipay’s long standing brand image as a trusted and reliable
intermediary.

2. How might Ant Forest, as a CSR initiative, increase the popularity of the Alipay app?
How does that contribute to the performance of Ant Financial?

As a CSR, Ant Forest is trying to influence consumer behavior and motivate green consumption
via the Internet. Being the first company who use the digital technology and social media to raise
the awareness of users for the protection of the environment, Ant Forest help Alipay to
distinguish themselves from their competitors. It helps Alipay to build its reputation as a trusted
and reliable intermediary. Due to their engaging strategy, Ant Forest was becoming a mainstream
experience for Chinese netizen because everyone wants to be a part of an organization that
changes the world. They want to be part of something amazing. Ant forest users also showed
higher user stickiness for Alipay. Ant Forest helps increase the interaction frequency of the users
in Alipay. In the past, Alipay users only open their app when they need to do transaction, but after
Ant Forest was established, they are more likely to open the Alipay App.

For Ant Financial, Ant Forest had fortified the company’s relationship with its customers. Ant
Forest was opening new doors, and building brand equity. This is not because Ant forest brings
them business value, but its positive impact on environmental protection and user lifestyles
alongside with the business value as a by-product. Ant Forest was able to bring a strong
foundation for a variety of high profile collaborations. For example: teamed up with UN
Environment to found the Green Digital Finance Alliance (GDFA), a global partnership bringing
together digital finance business and stakeholders to accelerate Fintech innovations that addressed
global environmental challenges.

3. Is Ant Financial well-placed for its market leadership to endure? How will its competitors
react to the Ant Forest app going forward?
Yes, The Ant forest program secures the leadership position for Ant Financial because this
business model is a breakthrough idea in using CSR strategy. However,online payment business
is changing fast in China so competitors will seek to copy the “planting trees” idea.Though
technology is patented,the idea of planting trees or any kinds of charitable efforts are not so
competitors will look for chances to surpass Ant Finance. Other issue is trust issue when Chinese
participants trust in charity has been shaken to some degree by famous charity scams in the past

Wepay Zhuanzhuan has already did the same model with “Million Forest plant” to attract
customers. In this operation, Zhuanzhuan will be launched online and donated offline to
participate in the “Million Forest Plan”. During this time, the users who participate in the
transactions within a specific range on the platform will generate "green power" and generate real
saplings for the "Million Forest Plan".
Tencent - Wechat promoted many charity campaign
+ people posting colorful paintings to help raise money and awareness for those with
mental disabilities
+ making in-store payments you will also receive virtual coins which you can use to donate
to a selection of charity causes
Ant Forest’s public participation model is already being tried in other countries.
In July, a version of Ant Forest launched in the Philippines, a country badly hit by deforestation
in recent decades. The mobile payments platform GCash plans to plant 365,000 trees within 365
days. GCash Forest already has 1.3 million users and planted its first batch of trees on 12
October.

Deng Guosheng, deputy director of Tsinghua University’s Institute for Philanthropy, believes that
companies that use corporate social responsibility initiatives to seek customer approval or even
extra profits can help achieve environmental aims – a sustainable win-win approach.Deng
Guosheng thinks the “tech + environment” model has its limitations.“Young people get more
involved with these approaches, they understand how it works. But older folk, or those in rural
areas, don’t participate so much,” he said.

In conclusion, this business model may still endure in short term and gradually Ant Financial has
to devise a new business model or strategy in CSR to keep up with the leading position.

4. How does Ant Forest contribute to helping Ant Financial/ Alipay create a competitive
advantage by attracting users? Is any competitive advantages that Ant Financial creates
through Ant Forest sustainable?
Ant Forest users showed higher user stickiness for the Alipay app. Before the launch of Ant
Forest, Alipay's community of friends focused mainly on money transfers and lucky money (red
package). The end of the transaction usually meant the end of interacting with the friend.

The essence of the payment tool is the life tool. If they can be opened at a high frequency, it will
obviously increase user dependence. Ant Forest caters to the public's attention to low-carbon
environmental protection and other public welfare activities, and successfully attracts users
through games. Especially offline payment using Alipay also gets green energy settings, so more
users are willing to choose Alipay to pay offline.

Moreover, Ant forest can improve the reputation of the Alibaba Group. Most high-frequency
users of mobile payment such as Alipay are people with passion and focus on environmental
protection and other public welfare activities. This is undoubtedly an influential part when it
competes with other payment tools such as WeChat Pay.

Reason for sustainable:


● The extension of social needs - Socialisation is a basic human needs. Ant forest is a good
and effective application to give people the thrill of social interaction. Moreover, they let
the users be proud to serve the public by planting real trees with unique identifiers. They
give the users sense of achievement
● Attachment - Users can form and strengthen relationships through the Ant Forest
platform.
● Authenticity - Ant Forest work with many tech companies to show people the actual data
trees that are planted and this motivates them.

5. How does Ant Forest use innovation as an enabler of long-term growth?


Through the games, Ant Forest captures two mentality of people, one is not to accept the disorder
of this world, and the other is to root the world for everyone’s goodness. This idea of combining
virtual and real depth has affected action of the public as never before. Hundreds of millions
people adhere to the low-carbon behavior that was difficult for every individual to adhere to
before the Ant Forest found.They combine social, games and Internet together.
In the long term, they can increase the frequency of user to use it. For example they came out
with some new model to let users interested in this application.

6. What should be Ant Forest’s strategy for growth and expansion of its user base going
forward? Should it involve going overseas? What would it have to do to achieve this?

A firm like Ali pay and ant financial services’ main goal was always to increase the traffic that
passes through the services they provide. The whole ant forest scheme was to capitalize on
people’s tendencies to want to do “the right thing” and people’s adherence to alipay, in essence
people like doing good deeds and being praised on them, while China’s daily life relies on
services like alipay du to high counterfeit bills and high robbery near atms, also modern day
people have to go to work, school and do errands. Then Ant forest simply created a game where
they reward you with an artificial tree(later a real tree), if you reduce your carbon footprint.

This business model was merely an alteration to credit card business model, where the banks that
gave you the card will reward you for using their card to purchase by rewarding you with air
mileage or discounts.One other way that Ali pay actually benefit from the ant forest scheme was
that CSR expenses (planting trees) are actually tax write off. So now, Ali pay gain a huge amount
of users, lowered tax and does not have to pay any kind of reparation to their users.

In terms of growth. We believe that the ant forest scheme needs to evolve to include other types
of environmental activities such as beach cleansing or maybe decrease meat eating to improve the
environment. However, Ali pay needs to be careful not to over commit to those activities. With
regards to increasing its user base, we are more pessimistic as their success was based on Ali pay
users. We believe that they will plateau at a certain point where there would not be anymore
additional users.

Going abroad is not impossible, Ali pay has to first overcome the hurdle of most countries
unwillingness to adopt this payment method. Therefore we believe that African countries and
South America could be a potential expansion path for Ali pay. As the aforementioned regions
suffer from less stable law and order. This kind of payment method and personal finance method
can prove beneficial for citizens from both regions.
Also another hurdle for Ali pay can be other countries’ impression on China, if China continues
to extend her hands into other countries political environment. Ali pay and other Chinese firm
may be faced with distrust and treated with hostility.

Conclusion :
Ant Forest was an ingenious scheme, not only did it prove a successful scheme when it fruition
into a tree planting action, it attracted users while also proving to the world that Ali pay, Ant
financial cares about the environment. Basically it has been a scheme which achieved both
financial benefits for Ali pay while branded Ant financial services and it parent company as an
environmentally friendly company. We also believe that it growing potentials may be hindered by
a lot of different factors, so Ant financial services may need to tread carefully.

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