Summary

Payment platforms, which largely derive their user base from thriving e-commerce and social media platforms, by far dominate the fintech space in China. Digital payment is the leading market segment in terms of transaction values. Total fintech investments in Asia inched up to a new record of USD 8.6 billion in 2016, although the number of deals fell by more than 8%. More than half the region’s total fintech investment came from one deal of Ant Financial’s USD 4.5 billion funding round.

The technologies used or fintech solutions offered in China are not something unique but a more successful adaptation compared to other countries. China has now publicly voiced its desire to be the leading country in financial technology development and adoption. After a few fraudulent practices in fintech especially in market place lending, regulations started becoming more stringent. As of right now, China has 65 national financial standards and 252 financial industry standards, which include the aforementioned financial payment client technical specifications, voiceprint identification, and more.

Almost half the world’s digital payments in 2017 were made in China, through apps, such as Alipay (owned by Ant Financial, an affiliate of e-commerce juggernaut Alibaba) and WeChat (owned by Tencent Holdings). Digitally savvy Chinese consumers, who have few reservations about sharing personal information, are ready to embrace FinTech offerings, creating opportunities for FinTech firms and incumbents willing to take on digital transformation. These opportunities will come initially from the under-banked or unbanked populations of small and medium enterprises (SMEs) and consumers with unmet needs. FinTech firms are also targeting the maturing demands of the burgeoning middle class for wealth management, insurance, and private banking.

Key Market Trends

SMEs Fintech Adoption Trends

SMEs are at a different point in their adoption journey compared to consumers. Companies are actively seeking technology solutions to increase efficiency and achieve cost efficiency across their business. They are also subject to regulatory requirements in some markets, which necessitate the adoption of products and services such as bookkeeping tools for audit and tax purposes, or business liability insurance. FinTech challengers are rapidly becoming reliable vendors for SMEs in these spaces, which have been historically underserved by incumbents.

Fintech Companies in Financial Industry in China

Fintechs in China is playing a crucial role in the financial services industry. Zhong An, the online-only insurance giant competing with traditional players in the gross written premiums showcases the significance of fintech in this sector. Coming to the segment-wise distribution within financial services sector, B2C mode of credit witnesses the highest proportion of fintech companies, followed by consumer finance and third party payment. These three segments sum up to around 77.08% of total number of fintechs in financial services sector. Earlier, the fintech market in China is flooded with P2P lending startups. As the government has tightened its control over internet finance due to increased fraudulent business models in the marketplace lending, the fintechs are shifting to insurtech, regtech and other B2B models rather than settling to B2C field.

Competitive Landscape

The report includes an overview of fintech companies operating across China and within one or a few countries. We wish to present detailed profiling of a few major companies which cover product offerings, regulations governing them, their headquarters, and the sector of operations. Currently, some of the major players dominating the market are listed below.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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