A new survey has found that Alibaba dominates China's Internet finance market via its popular Yu'ebao fund, but Tencent, another Internet giant, poses serious challenges given the user base of its WeChat application.

The survey was carried out online on Feb. 26 with more than 1,000 respondents by global research consultancy TNS, and the results were published on Thursday by consumer insight company Kantar Worldpanel.

Internet finance is the buzzword of China's financial industry. Altogether, 840 respondents of the survey said they have bought fund products either from Alibaba's Yu'ebao or Tencent's Licaitong, both of which are online money market fund products.

Yu'ebao and Licaitong are fast-rising stars in China's wealth management market, since they offer much higher returns than bank deposits.

Traditional banks offer a maximum interest rate for one-year deposits of 3.3 percent, while Internet financial products like Yu'ebao offer a seven-day annualized yield of around 6 percent.

More importantly, Internet financial products like Yu'ebao are easy to buy and sell.

Apparently, Yu'ebao has the lion's share of the market. Thirty-four percent of respondents said they bought only Yu'ebao, and 47 percent said they bought both Yu'ebao and Licaitong but invested more money in Yu'ebao.

Only 1 percent of respondents said they bought only Licaitong. And 8 percent said they bought both Yu'ebao and Licaitong, but invested more money in Licaitong.

The remaining 10 percent said they invested equally into Yu'ebao and Licaitong.

Since being launched in June by Alipay, China's largest third-party payment platform and a subsidiary of Alibaba, Yu'ebao has attracted more than 81 million users with aggregate investments of nearly 500 billion yuan (81 billion U.S. dollars) as of Feb. 28, 2014.

The sum is bigger than the total value of all other money market funds in China.

However, looking closer at the user profiles of the two funds' platforms -- Alipay for Yu'ebao and WeChat for Licaitong -- the latter could pose a serious challenge to Yu'ebao in the future.

Among all respondents to the survey, 932 said they're WeChat users and 982 said they use Alipay.

Affluent users account for a slightly bigger share of WeChat users compared to that of Alipay. Thirty-eight percent of WeChat users fall in the bracket of having a household income above 189,000 yuan per year, while it was 35 percent for Alipay.

Alipay is leading at the 118,000 yuan to 189,000 yuan bracket. Alipay's 32 percent beat WeChat's 30 percent. The two platforms are tied on other income levels.

Also, WeChat users tend to use all functions of the mobile app -- 44 percent of respondents said they use all WeChat functions, such as social networking, booking taxis and playing games.

This would make WeChat a potential center of people's mobile usage. On the contrary, only 9 percent of those polled said they use "all functions" Alipay is offering, while 56 percent said they "use only the payment function" of Alipay.

To make the picture even rosier for WeChat, the survey found that the higher household income a user has, the more likely he/she will be to use all the functions of WeChat.

The future of the Internet finance depends on which company can lure more users to choose their payment platform more frequently and hence trust them with money in their hands, according to the survey.