It is no secret that China has a booming Fintech sector, producing numerous unicorns (valued at $1B+) in the last few years. So much so, that it has drawn immense global interest from players looking to model their strategies on this market.
Ning Ma, Founder & Partner of LingFeng Capital shared his insights on the landscape of China's fastest growing companies from his first-hand experience with the market.
Below are key insights generated:
- As China transforms into a consumption-led economy, consumption upgrade and consumer finance are 2 huge investable sectors in the next 5-10 years
- China consumer finance/fintech sectors have robust growth/high profitability, driven by:
- Extreme under-supply and under-penetration, leading to high profitability
- Fast growth of e-commerce and smart-phone usage & new finance business model based on big data
- Millenials increasingly adapting to borrowing , insurance products, and non-cash payments
- Overall improving industry infrastructure (i.e. consumer credit bureau and related regulations)
- China new finance players are competitive globally and will emerge as a big asset class in USA / Hong Kong / China Capital markets in the next few years
- Fintech companies effectively help FI's to improve financial inclusion imperatives as well as their operational efficiencies, etc.
- Fintech adoption in China is higher than the rest of the world, with a current 69% of digitally active consumers in China using Fintech services, well above the global average of 33%
- Capital markets continue to aggressively pursue the Fintech industry in China. In 2016 alone, investment in mainland Chinese and Hong Kong fintech ventures totaled $10.2B, surpassing North America's $9.2B and Europe's $2.4B
Join in on the conversation with Aqsa Zubair when you subscribe to Future of Financial Services.