surge of fintech services3 Jan 2017 13:54
the world’s four most valuable fintech unicorns – a startup company worth more than US$1 billion – are Chinese. The largest is Ant Financial, an arm of e-commerce giant Alibaba, and is valued at US$60 billion.
Second is the peer-to-peer lender Lufax (US$18.5 billion), followed by JD Finance (US$7 billion), a joint venture between e-commerce site JD and Tencent, and then instalment payment firm Qufenqi (US$5.9 billion).
The surge of fintech services is a growing headache for traditional banks which have been left painfully behind in the competition for e-commerce and new payment methods. These new services are dominated by the internet giants – Alibaba’s Alipay, which has more than 50% market share, Tencent’s WeChat Wallet, based on its popular instant messaging service, and the Google-like Baidu.
The big tech companies are also investing heavily in smaller startups to access the next generation of financial services, including blockchain technology, as used by Bitcoin, and artificial intelligence.
China fintech facts
• Country is home to eight of the world’s 27 current FinTech “unicorns” – technology companies that investors value at more than US$1 billion.
• There were 710 million internet users as of June (more than the US and Europe combined), bringing the online penetration rate to 51.7%, from 1.8% in 2000 and 8.5% in 2005. At this pace, China will soon catch up with North America’s 89% penetration and Europe’s 73.9%.
• China is already the world’s largest and most developed retail e-commerce market, accounting for 47% of global digital retail sales – the result of a massive domestic retail market in a closed digital economy.
• The smartphone is becoming the universal internet access device. As of 30 June 2016, 656 million people, or 92.5% of users, were going online via connected devices, driven by the development of “Smart City” and “Wireless City” public access wireless networks in major cities.
• Individuals making online payments with mobile devices hit 358 million at the end of 2015. The 64.5% increase from a year earlier came despite rising concerns about the security of mobile finance activities. The utilization ratio of mobile online payments stood at 57.7%.
• Mobile banking continued to expand exponentially, with 6.3 billion transactions totalling 29.3 trillion yuan (US$4.4 trillion) in the second quarter of 2016.
Source: The Rise of FinTech in China, by Ernst & Young and DBS
http://www.atimes.com/article/china-going-cashless-thanks-fintech-boom/?utm_campaign=crowdfire&utm_content=crowdfire&utm_medium=social&utm_source=twitter
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