Lucy Peng Lei, chairwoman of Ant Financial Services Group, the financial affiliate of Alibaba Group Holding Ltd, apologized on Monday after a new product called "Circles" sparked controversy among Chinese netizens.
"The past two days have been the most difficult since I joined Alipay seven years ago," said Peng in an internal letter published on Alipay's official Sina Weibo microblog.
Last Thursday the Chinese tech giant updated its Alipay app with a new social feature dubbed "Circles", which allowed users to share messages and photos.
On two of its circle groups "Campus Diary" and "White Collar Diary," only women were allowed to post content and only members with Sesame Credit scores above 750 were allowed to comment. Many of the posts were suggestive photos accompanied by sexual comments meant to attract tips from male followers.
Peng who is on a business trip in the United States, said those groups suspected of being involved will be removed right away.
"The account of those who published erotic photos maliciously and violated the bottom line will be closed permanently and they will never be allowed to register again", Peng said.
Alipay needs to see transformation, Peng said frankly in the letter, but she still believes Circles is a good product.
In her letter, Peng appreciated those who helped analyze and gave rational ideas, and also thanked the thousands of netizens who spoke out.
"The most precious thing for Alibaba is the courage to correct mistakes," founder and executive chairman of Alibaba Group Jack Ma said on the company's intranet. "Alipay should keep trying, while Alibaba's employees should learn to rethink and examine themselves."
Alipay, which boasts 450 million real-name users, dominates the online payments industry in China, but is facing increasing domestic competition from Tencent's rival WeChat payment system.