It is during the process of economic expansion of a country when the need for the institutionalization and liberalization of the financial solutions and institutions that facilitate consumer finance arises. This process takes place as a country is in transition from a developing to developed country, as a country transforms its economy from a manufacturing economy to a consumption-oriented one, and as the middle class develops a demand for financial solutions to support their personal consumption.
This report analyses the case of China by providing an overview landscape of how this process has been happening, describing the characteristics and trends that make China ripe for consumer finance and its historical context, an analysis of the different channels for consumer loan products in China, the future consumer loans market trends, with a focus on end-customers and players in the market, and the future of regulation and risk in the market.
We analyse the global context of consumer lending to provide a contextualised view of the consumer lending market in China. Analysing the development of the consumer loan market in Europe, the United States and Japan, as these are the major economies in the world where consumer loans have taken an increasingly important role in day-to-day consumption and that provide an excellent benchmark for the analysis of the future development of the consumer loan market in China.
As we compare China with global competitors one can realize how fast this market has developed here, where this process that has been taking place for decades in other countries, is changing the financial market in China on a year to year scale, not decades. We can see an example of this when we compare China with the United States, where consumer loans began over two hundred years ago in the 19th century, a process that has taken 30 years in China, propelled by the growth of the economy, as well as the exceptionally fast adaptation and creation of new technology in China. China's consumer lending market here changes every year, not only in demand, but in laws that regulate this market and technology that facilitates and accelerates the use of loans, making this an exciting market that is full of development opportunities.
We place a strong focus on the analysis of the different players in the consumer finance market in China, analysing their development characteristics, their different platforms to offer consumer finance solutions and their integration into their business model, as well as a strength and weaknesses analysis of the platforms.