Major listed companies in the industry: Guosheng Financial Holding (002670), Haiyin (000861), Chongqing Department Store (600729), Bank of Beijing (601169), Lexin Group (LX.).US), FinVUS), XRFUS), Yiren Jinke (yrdus) and so on.
-- Summary of the competitive status of China's consumer finance industry
From the perspective of the five forces competition model, the upstream bargaining power of the consumer finance industry is strong, because of the influence of supervision, the interest rate of the product shall not exceed the red line of the latest regulatory guidance window, and secondly, the main financial institutions that provide funds to the consumer finance industry are financial institutions, they have a higher voice in the capital lending of the entire industry, and the relative downstream bargaining power is weak, but with the expansion of the consumer loan market in recent years, the downstream bargaining power will have the opportunity to improve. In addition, due to the large number of competitive factions in the industry, commercial banks alone have many types of credit card business, so the competition is fierce. And as the industry moves toward standardization, there will be an influx of potential new entrants, but branding takes time, so it's less threatening.
According to the above analysis, the competition in all aspects is quantified, 1 represents the largest, 0 represents the smallest, and the current five forces competition in China's consumer finance industry is summarized as follows:
-- Competing factions in China's consumer finance industry
In recent years, the scale of China's consumer finance has grown rapidly, and the credit structure has been optimized to a certain extent, and a multi-level consumer financial service system for different groups has been formed, mainly commercial banks, private banks, licensed consumer finance companies, Internet financial platforms, and small loan companies. From the perspective of different factions in the industry, each faction has different advantages according to the perspective of capital, customer positioning, product characteristics and core competitiveness. From the perspective of funds, the funds of commercial banks are mainly deposits, bond raising, central bank customer reception, interbank lending, just the opposite of Internet consumer finance, which comes from interbank loans, ABS, shareholder loans and free funds. From the perspective of customer groups, commercial banks are positioned in the middle and high-income groups, while private banks and consumer finance companies are concentrated in the middle- and low-income groups.
From the perspective of factional competition, commercial banks have the strongest comprehensive competitiveness relying on higher capital scale and customer positioning, followed by Internet consumer finance companies, which show a strong trend of development momentum with the support of major platform traffic and the advantages of data technology. Consumer finance companies are developing in an orderly manner under the regulated management of licenses, and private banks and microfinance companies help low- and middle-income groups to carry out rapid capital turnover, but their competitiveness is weaker than that of the above-mentioned factions.
——The development process of Zhaolian Consumer Finance
Approved by the China Banking and Insurance Regulatory Commission (CBIRC) and jointly established by China Merchants Bank and China Unicom, Zhaolian Consumer Finance is a licensed consumer finance company with its registered address in Qianhai, Shenzhen, and its scale continues to lead the industry. Zhaolian Consumer Finance*** was approved for construction in September 2014, approved to open in March 2015, and the registered capital will reach 10 billion yuan after the conversion in 2021, currently ranking first among 31 licensed consumer finance companies.
-- Zhaolian Consumer Finance promotes the high-quality development of consumer finance manufacturing
From the perspective of operation, from 2018 to 2022, the operating income and net profit of Zhaolian Consumer Finance increased as a whole. In 2022, the operating income of Zhaolian Consumer Finance will be 1750.1 billion yuan, achieving a net profit of 33$2.9 billion. Overall, the company's business performance is better.
-- The penetration rate of consumer credit exceeded 40 percent
The penetration rate of consumer finance in the overall credit can reflect the current consumer demand for consumer finance. Traditionally, China's overall credit behavior is relatively conservative, so there has always been an insurmountable bottleneck in China's financial industry, especially in the consumer credit sector. But in fact, China from 2014 to 162% grew to 43 in 20222%, an increase of 27% in just 7 years. With the upgrading of consumption and the activity of private lending, consumer credit ushered in a period of development, which in turn promoted consumption upgrading, formed a positive feedback loop, built a prosperous picture of vigorous development of consumer credit, and greatly boosted market confidence.
Note: China's narrow consumer credit balance penetration rate = China's consumer credit balance China's retail sales of consumer goods.
-- The number of people in financial demand is close to 400 million
According to data from the China Banking Association, from 2019 to 2022, the number of customers served by consumer finance companies has increased rapidly year by year, from 12.7 billion people to 33.8 billion people.
According to the "China Consumer Finance Company Development Report (2023)" released by the China Banking Association, by the end of 2022, the number of customers served by consumer finance companies exceeded 300 million, reaching 33.8 billion person-times, a year-on-year increase of 184%;The asset scale and loan balance both exceeded 800 billion yuan, reaching 884.4 billion yuan and 834.9 billion yuan respectively, a year-on-year increase of 175%, which is higher than the economic growth rate and consumption growth rate, has made a positive contribution to the recovery and expansion of consumer demand.
For more research and analysis of this industry, please refer to the "Analysis Report on Market Prospect and Investment Strategic Planning of China's Consumer Finance Industry" by Qianzhan Industry Research Institute.
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