(Yicai Global) Jan. 14 -- TikTok operator ByteDance has set up a factoring financial service firm in Hainan province as the Chinese tech giant extends its footprint in the financial field and positions itself to take advantage of the needs of businesses in China’s southernmost province’s upcoming free trade port, the Beijing Business Today reported today.

Hainan Zitiao Commercial Factoring, which offers commercial factoring, financing consulting, corporate credit investigation and bankruptcy liquidation services, was registered in Sanya on Jan. 12, according to company data platform Tianyancha. With a registered capital of CNY30 million (USD4.6 million), it is wholly owned by ByteDance.

ByteDance has yet to comment on the matter.

Factoring companies provide financing to firms by buying their accounts receivable, or the amounts invoiced for but not yet paid, and undertaking to collect the money from clients for a fee, consumer finance industry expert Su Xiaorui told Beijing Business Today. The financing model mainly serves the needs of small companies, he added.

The establishment of a factoring company could have to do with ByteDance’s recent foray into e-commerce, said Wang Pengbo, a senior financial analyst at Beijing-based thinktank Analysys.

In June last year ByteDance announced its intention to monetize the online traffic passing through its sites. The following November, it set up a small loan service on its short video platform Douyin, the Chinese version of TikTok.

This small loan product is not designed to be profit-making, but to unleash the purchasing potential of ByteDance’s internet traffic, Tian Jie, another financial analyst at Analysys, said earlier.

A newly-emerging e-commerce business should have these services, Tian said. All China’s mainstream e-retailers, including Alibaba Group Holding, JD.com and Meituan boast their own credit services.

Beijing-based ByteDance has been positioning itself discreetly in the mobile payment field since 2018 and has since obtained licenses for brokerage, insurance and third-party payment through a series of mergers and acquisitions.

Editor: Kim Taylor