Banks still dominate China's distribution landscape with a roughly 50% share, while other traditional financial firms control the rest, said Mr. Chou.
While there are "hundreds of platforms out there," Ant Fortune stands out for the sophistication of the artificial intelligence tools it provides money managers to serve cellphone-focused customers and a 520-million-strong user base "no one else can match," said Le Shen, a Beijing-based spokesman for Ant Financial Services.
That combination has caught the attention of global asset management firms.
When Massachusetts Mutual Life Insurance Co. agreed in August to sell its Hong Kong insurance arm to Alibaba affiliates in exchange for a 25% stake in Alibaba's Yunfeng Financial Group, Eddie Ahmed, the head of MassMutual International, cited potential opportunities to partner with "an innovative network of entrepreneurial Hong Kong- and China-based businesses" on initiatives from big data to asset management as one charm of the deal.
A Springfield, Mass.-based spokesman for MassMutual declined to provide further details until the deal is completed later this year.
Thomas Cheong, Hong Kong-based president, North Asia, with Principal Financial Group Inc., in an interview attributed the strong 2017 his firm's Beijing-based joint venture with China Construction Bank Corp. enjoyed to its "breakthrough with Alibaba."
CCB-Principal Asset Management Co. was one of seven managers selected to join Alibaba's Tianjin-based Tianhong Asset Management Co. in managing money market funds for customers, and one of an initial separate class of seven firms selected to offer a broader range of funds on the platform, said Mr. Cheong. He declined to say how much CCB-Principal manages from the platform.
Ant Financial's Mr. Shen said the number of money managers offering funds on the Ant Fortune platform has grown to 25 over the past six months.
Daniel J. Houston, Principal Financial's chairman, president and CEO, said during an earnings call for the quarter ended Sept. 30 that CCB-Principal's success in getting on Alibaba's online financial platforms "contributed meaningfully to our $15.6 billion of positive net cash flow for the quarter in China."
Mr. Cheong said the opening for CCB-Principal and the other firms has coincided with signs of growing concern from regulators about the scale of the more than $260 billion Yu'E Bao fund.
The CEO of a Shanghai-based fund management company, who declined to be named, said having a sum of money "bigger than two major commercial banks" overseen by one small money management firm has left regulators worried that a market crisis could spark a short-term liquidity squeeze capable of shaking the banking system.
Mr. Houston, while conceding the bulk of CCB-Principal's third-quarter net inflows were "short term in nature," said the Alibaba platform business was boosting CCB-Principal's name recognition and "contributing to our efforts in China."
Getting on Ant Financial's digital distribution platform required CCB-Principal to "adapt operations to a company that works 24/7," where an ability to decentralize decision-making becomes critical, contended Mr. Cheong.
Meanwhile, Alibaba's fellow online giant, Shenzhen-based Tencent Holdings Ltd., obtained a license from the Shenzhen authorities at the start of 2018 to sell third-party funds. Asked if the two heavyweights would pursue similar strategies, a Tencent spokeswoman said in an email that "our strategy of financial services or products on our platform is quite unique" and probably can't be compared with other platforms at this time.