(Yicai Global) June 13 -- Industrial and Commercial Bank of China is discontinuing its eight-year-old e-marketplace from June 30 as competition gets more intense and as the country’s banking authorities require lenders to spin off their non-banking businesses, industry insiders told Yicai Global.

The world’s biggest bank by assets plans to upgrade the platform according to the development direction of the internet and finance sectors, the person in charge of ICBC’s e-commerce platform said a few days ago.

The move is likely to meet regulatory requirements as authorities have asked lenders to divest their non-banking businesses, an insider at a state-owned bank told Yicai Global.

Competition is also getting more intense, the person said. Bank-run e-commerce platforms do not have the product variety and customer base of internet-based ones.

The ICBC E-commerce Platform sells hundreds of different types of goods including home appliances, cars, financial products, clothes, shoes, food and beverages, jewelry and tourism packages. Back in 2014, the move seen as a way for ICBC to seize the high ground in internet finance. The platform’s gross merchandise volume swelled to CNY1.1 trillion (USD165.5 billion) in 2018, and it had 146 million registered users as of the end of 2019.

But the main problem is disproportionate costs, the insider said. Selling merchandise online is not banks’ forte and their commodities have no competitive advantages. Customers are not loyal and they mainly shop on the website to use up their banking reward points, he added.

“Although these platforms can offer payment services and financing help to the merchants, banks face big competitive pressure as they do not have many advantages in the online retail sector, a participant in the construction of a bank’s e-commerce platform told Yicai Global.

A number of other lenders have offloaded or closed their e-commerce platforms recently. Agricultural Bank of China changed the operator of its Xingnong app from Jan. 1 and China Minsheng Bank closed the Minsheng E-commerce app on May 31.

Editor: Kim Taylor