Leading Lenders in China Internet Finance – Part 2

China Internet LendersThe China Internet Finance market (Part -1) has taken off in a big way due to favorable Government Policies to push the country ahead of the United States. We continue our coverage on the same.

Paipaidaiwas founded in June 2007 as one of the earliest P2P financial service companies in China. It operates under online processes and focuses on P2P small amount loan business. Paipaidai has a total of 2,000 employees nationwide. 50% of them belong to the manual service team. High quality service helps reduce the negative effect generating from non-standardised products and contribute to the final customer conversions. Besides, the users are mainly blue collars from tier-three or tier-four cities, who have limited understanding about financial products. The platform is able to conduct identity authentication after customers have explicit demand of loans. Under this process, users will find it smooth and simplified before making a final decision.

JIMU is a leading domestic financial technology company launched in August 2013. It focuses on middle-class user group, providing comprehensive (more…)

Alipay / WeChat – Tenpay – Leaders in Chinese Online / Mobile Payments Market

Chinese Mobile Online Payment LeadersOnline payment is the basic infrastructure of internet finance. In China, online payment is essential for the development of the e-commerce market, as consumers need to complete the entire purchase process through online third-party payment services.

Launched in 2004, Alipay is now the largest third-party payment service provider in China, taking a 47.6% market share in the third-party payment market of China in 3Q15, according to iResearch. In April 2015, Alipay disclosed monthly active users (MAU) at 270 mn, from 190 mn in Oct 2014, with an average of 45 mn daily transactions. We estimate that Alipay has around 500 mn annual active users.

Alipay has established partnerships with (more…)

How & Why Xiaomi Built a Different Eco-System Model ?

We view Chinese Company, Xiaomi as a mobile Internet company, rather than a hardware company, mainly because Xiaomi captures a significant portion of user life time value (LTV) after hardware purchase through a 3-way monetization model (hardware, Internet service and software). On the contrary, hardware companies capture vast majority of the user LTV at hardware purchase.

Hardware, which includes various in-house developed Xiaomi devices such as Xiaomi smartphones, tablets, Xiaomi Router, etc. Xiaomi devices are priced at significantly lower prices vs. competitors, which should drive user acquisition. (more…)

Rising Use of Mobile for E-Commerce in China – Report

According to CNNIC, online shopping transactions in China reached RMB1.26t in 2012, up 67% YoY and representing 6.1% of the country’s total retail sales. The country’s online shopping population reached 242m (up 25% YoY), representing a 43% penetration rate of the total online population. Mobile shoppers saw much stronger growth. The number of those conducting e-commerce on mobile devices increased by some 137% YoY, reaching 55.4m as of 2012

Over 56% of total online shoppers spent more than RMB1,000 in the year, while some 6.8% of them spent as much as RMB10k online. Meanwhile, people tended to make online purchase more frequently than 2011.

A majority of users made payments through online banking or third party payments, (more…)

Growth in Mobile Payemnts in China

According to iResearch, the growth of mobile payments in China is likely to be driven by,

  • The country’s expanding mobile internet economy. iResearch revealed that the scale of China’s mobile internet economy reached RMB97.6b as of 2012, up 148% YoY, much higher than the 46% YoY growth of the desktop-based internet economy during the same period.
  • Smartphone user base. Smartphone ownership in China reached 320m, up 88% YoY. iResearch expects China’s smartphone penetration rate to exceed 50% by 2016. The expanding base of smart terminals and maturing mobile internet models are likely to drive the growth in mobile payments in China.
  • Technology evolution –  Mobile internet connection speeds have been greatly enhanced due to the adoption of 3G and 3G+ technologies. This has indeed driven a shift of internet activity from desktops to mobile devices, thus raising more demand for services such as mobile payments.

Mobile payments saw roughly RMB151.1b transaction volume in China in 2012, up 89% YoY. In terms of means of payment, mobile remote payments accounted for an absolute majority (~97.4%) of overall mobile payment transactions, including mobile internet payments (~51.7%) and SMS-based payments (~45.7%). iResearch expects SMS-driven payments to decline sharply in the next couple of years as the mobile internet becomes more dominant.

NFC (near-field communications)-based payments, representing a 2.6% market share in 2012, is still very much in a nascent stage. A survey conducted by iResearch in November 2012 revealed that NFC-based payments is the most anticipated payment method for 2013, representing ~24% of total respondents. A relative lack of industry standards and payment infrastructure (often involving the costly replacement of payment terminals), NFC-based payments is likely to maintain a low single-digit market share from 2013-2015, despite expected strong growth in absolute value.