On March 25, 2019, according to Tianyancha (天眼查), Alibaba and Tencent co-invested CNY 517 million (USD 77 million) in Baiwang (百望), a company providing electronic invoice service based on its featured “invoice cloud”.
Baiwang is a company helps enterprises with invoice issues including generating invoices, management of invoices, and other invoice-related services. Invoice as a most important tax filing and preparation material is different from a receipt. Invoice is designate for tax purposes with unique identity acknowledged by the state tax department, while the receipt is generated by the enterprise itself and weak in tax-related matters.
To enable the invoice print-at-office process in China is a complicated procedure for small business and enterprises since the invoice print-at-office procedure will take steps. If the amount of invoices generated per month is low, small businesses and enterprises do not have the incentive to have a print-at-office function. The business owner will go to several places (such as Bureau of Industry and Commerce and Taxation Administration) to complete the application and wait for the approval before being able to print an invoice at the office instead of going to Taxation Administration to pick up the printed invoice.
Besides the above process, the invoice generation costs time and the automatic filling function provided by Baiwang and other similar companies saves the seller side from copy-paste works. Buyers input their taxation information and the invoice service provider can accordingly generate an invoice eliminating the human error occurred during copy-paste.
The appearance of Baiwang and alike companies relieve small businesses from invoice generation and large companies from invoice management through its invoice cloud. In 2017, electronic invoices were issued 1.31 billion copies and the number tripled in 2018 to 3.95 billion. The market size in 2017 was approximately CNY 250 million (USD 37.3 million) and the size also tripled in 2018 to CNY 750 million (USD 111.9 million). In 2022, the expected market size might reach CNY 10.4 billion. The newly published e-commerce law at the end of last year requires all sellers should be able to provide invoices to buyers. The policy urges the development of invoice business. Considering the feature of e-commerce, an electronic invoice will be the most compatible format for online business comparing sending a paper copy by mail.
The two largest giants in China, Alibaba and Tencent, co-invested at the same time, which deviates from the mass’ knowledge. Alibaba and Tencent are competitors in many areas such as e-commerce, social network, third-party payment, cloud service, and so on. Currently, the star application of each has introduced electronic service to its users.
On Wechat, the star product of Tencent, users have access to personal invoice management, which is installed in the app and stores all invoices received by the user. Alipay has the similar function since its business rooted deep in e-commerce andthe daily large volume of transactions has strong invoice demand.