There is a belief in China that Fintech is going to be larger than E-Commerce and the race is for companies to stake their claim in this new market. China has a massive emerging middle class and very little traditional banking services for consumers and small businesses. Of the 1.4 billion people in China, only about 300 million are in the national credit bureau, which means that more than a billion people have no credit profile. Hundreds of millions of Chinese “unbanked” consumers are middle class, have high discretionary income, and would be considered prime or super prime borrowers. On top of that, the large Chinese banks have no history in making consumer and small business loans and were never designed for that purpose (they make infrastructure and commercial real estate loans).
This huge void in the market has been identified by virtually every major Chinese company that has a business-to-consumer (B2C) relationship. If a firm has data on a large sample set of consumers, then they have a unique proprietary edge from which to assess the creditworthiness of those unbanked consumers. We are seeing the leading Chinese companies from a diverse set of industries muscle their way into the fintech sector. This article highlights some of the key players that have made the horizontal jump into fintech.
Ant Financial Services Group is owned by Alibaba Group, the largest e-commerce firm in the world. Ant Financial is focused on serving small and micro enterprises as well as consumers. With the vision “to turn trust into wealth,” Ant Financial is dedicated to building an open ecosystem of Internet thinking and technologies while working with other financial institutions to support the future financial needs of society. Businesses operated by Ant Financial Services Group include Alipay for payments, Yu’e Bao for money market services, Ant Fortune for wealth management, Ant Check Later and Ant Micro Loans for financing, Zhima Credit (formerly Sesame Credit) for credit reference, Zhao Cai Bao for online lending, and MYBank for small business lending. Ant Financial is the largest fintech company in the world.
JD Finance Group operates seven lines of business: supply chain finance, consumer finance, crowdfunding, wealth management, payment services, insurance and securities trading. JingBaobei is their microlending platform and Baitiao is their crowdfunding platform. Jintiao and Xiaobai are their wealth management businesses. Through their access to transactions and credit management systems the companies provide financial services to enterprises and consumers.
Baidu Jinrong is the financial services arm of Baidu Corporation that was formed in 2015. Baidu operates the second largest search engine worldwide behind Google. Baidu Jinrong is focused on many different verticals under different brands including consumer finance (Baidu Umoney), wealth and fund management (8 Baidu), payments (Baidu Wallet) and financial asset transaction platform services. Through joint ventures the company also does business in internet banking and insurance. [Read more…]