Displaying items by tag: online finance

Xiaomi teamed up with E Fund Management to offer a new money market fund last week. The fund will be available on the wealth management app installed on the Xiaomi operating system and will be similar to products offered by Alibaba and Tencent in that it offers higher-than traditional bank deposit rates and allows nearly instant liquidity.

A new partnership between CreditEase and Wellington has changed the rules with an incredibly easy way for the increasingly wealthy middle-class to invest abroad. 

There are now 18 million shoppers in China who buy goods from international platforms and have already spent RMB 216 billion doing so, according to Nielsen. The market is constantly growing, boosted by a more affluent middle class and government support. In our Top 10 China Banking Technology Trends report we talk about how China UnionPay extended its cross-border payments expertise to the ecommerce and joined the industry with its Haigou service in 2014. A new entrant to the cross-border e-commerce market is SF Express. SF is one of China's major logistics and delivery companies and relies on an entirely different set of strengths to develop thier business.

Alibaba is yet again launching another investment product, and this time it will give its Alipay customers the option to invest in gold.

Baidu Baifa 100 Index Fund, the first big data-based quantitative strategy fund in China, announced that it was closed for new investors only  24 hours of online sale at 15:00 on October 28th.

Last week, Alibaba’s finance arm rebranded their “Small and Medium Financial Services Company today to “Ant Financial Services Group” or “Ant Financial”.

In the 2013 annual report issued by the Peoples Bank of China (PBOC), the organization addressed the issues related to the Internet finance. What is the forward looking Internet finance strategy?

Cracks are starting to show in the once impervious armor of China's online finance platforms as yields have dropped 20% from their highs. Ranging from about 4.7-5.6%, the current highs are much lower than the 6-8% that we saw at the end of 2013 and beginning of 2014.

China's online finance platforms facing headwinds

Realistically though, this isn't surprising. As we have discussed before, these platforms were running on borrowed time. Whilst the business model made sense, the inter-bank lending rates and the negotiated deposits that the main China online finance platforms were able to negotiate were a bit of a perfect storm for the platforms.

Now as the banks have put limits in place on the amount of money that can be moved on and off the platform at any one time, we're starting to see the market's reaction to what has caught most banks and the regulators completely off-guard. This is unlikely to be the last push-back from the banks on these new financial products. 

Unclear Regulation

Yet the platforms still have over 1.45 trillion yuan (US$230+ billion) on their platforms and this is unlikely to rapidly decrease anytime soon. 4-5% is still much better than the average retail consumer could get on a bank demand deposit in most of China's main banks and the convenience can't be beat - very easy to get money on and off the platforms, although within the limits set out by the PBOC.

This is far from the end of the story thought. We expect the growth of the platforms to certainly slow and although its still a bit unclear as to what the regulation will be, further regulation and requirements from the PBOC is inevitable as we go forward in 2014. This is all the more critical as Alibaba moves forward on the IPO plans. Can the company count on that part of the business to still drive revenue?

The latest figures from online saving funds financial statements have shown that the BAT (Baidu, Alibaba, Tencent) online money funds continued expanding. The 2014Q1 data reveals that Tianghong Zenglibao, relying on the huge client base of Yuebao, lead the market and is the first online saving funds that exceeds RMB100 Billion.

An interesting graphic from IDC and WSJ looks at the declining growth rate in smartphone sales in China. China's smartphone market is maturing.