Popularity of online commerce fast transforming the face of banking in China
Systematic deregulation of the domestic financial services industry, coupled with the popularity of e-commerce platforms, heralds sharper competition in the future. December 09, 2013 | Bertrand PigeonThe emergence of online commerce has transformed retail services in China, with self-employed resellers, rather than multinational merchandisers, the norm these days on online market platforms such as Alibaba Group’s Taobao. Not unlike Europe and US’s next generation consumers, Chinese shoppers’ habits have shifted from a traditional shop setting, with products to see and touch, to an internet-based market place on which customers rank shops and products; by breaking the barrier of the shop location, the word-of-mouth has taken on a whole new level. This dematerialisation has also accelerated growth of online payments services and created desire for large corporates to explore opportunities in the banking industry. Alibaba, one of the largest e-commerce platforms in the country, already features a small-loans programme for merchants on its site. The group recently received permission to securitise these loans, enabling it to increase lending without the need for a full banking license. Although Chinese banks have increased lending to small and medium-sized firms, most entrepreneurs and private businesses still struggle to acquire bank credit, and have had to turn to friends, family, underground banks or investor groups to meet their financing needs. According to Chinese banks’ interim reports, by end June 2013, micro and small business (MSE) loan balances at Industrial and Commercial Bank of China, China Merchants Bank and China Minsheng Bank were valued at $298.7 billion, $84.7 billion and $62.3 billion respectively. In comparison, AliFinance, issuing loans through both Hangzhou and Chongqing micro-credit companies, served 240,300 small businesses and issued loans totaling $13.24 billion), with a loan balance of $0.32 billion. Ma Weihua, ex-president of China Merchants Bank, acknowledged that there were vast growth opportunities for financial institutions in the MSE segment, but asserted that the likes of AliFinance wou... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Channels, China, Innovation, Internet Banking, Retail Banking, Technology & OperationsChannels,China,Innovation,Internet Banking,retail,technology, Channels,China,Innovation,Internet Banking,Retail Banking,Technology & Operations, Keywords:Alibaba Group, Taobao, MSE Lending, ICBC, CMB, CMBC, P2P Lending, Tencent, Suning, Macrolink Real Estate, Baidu Alibaba Group, Taobao, MSE Lending, ICBC, CMB, CMBC, P2P Lending, Tencent, Suning, Macrolink Real Estate, Baidu
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