China’s technology finance (FinTech) companies still have absolute advantages in going out to sea. Perhaps the breakthrough point is that you need to find a “high leverage” to allow limited resources to be realized efficiently.
In the past few years, there seems to be a law–just captured the signal of “the vent”, and the cohesiveness is ready to go, and in a flash, the giant has already been laid out. The same is true for FinTech.
In 2018, FinTech’s “Gale” was on the rise. Ant Financial’s official announcement of a $14 billion transaction in Q2 in 2018 set a new record for the Asia-Pacific region, accounting for nearly 62% of the total investment in financial technology in the Asia-Pacific region that year. In 2017, the total investment in Fintech across the Asia-Pacific region has just reached $12.5 billion.
However, this is just a record of ants’ gold suits, and the potential of the mutual gold giants to sweep the vents, other small and medium-sized enterprises are far behind. In the field of China’s FinTech, for tens of thousands of small and medium-sized technology finance (FinTech) companies, is there any opportunity to stand out and become a unicorn queue?
“Old domain” is full
According to the Yiguan Qianfan Index, as of now (November 2019), Alipay monthly users exceed 640 million, and Jingdong Financial has nearly 180 million monthly users. In the fiscal year of 2018, the WeChat, which has nearly 1.1 billion live monthly, has also embedded in WeChat payment to 800 million. Among the mutual gold giants, only Ali, Tencent, and Jingdong have already divided up most of the “comprehensive gold service” market.
In fact, in addition to the “Comprehensive Gold” track, the formation of the head enterprise has been basically formed in various circles of the FinTech field and on the major tracks in each circle (as shown below) The top 50 financial technology”, the development of the FinTech industry, has also matured from the initial stage of 2013.
Figure 1: Top 50 Chinese Financial Technology
Source: Facebook “China Financial Technology Sea Paper”
According to the “2018 Global Financial Technology Center Report” jointly published by the Sinai Laboratory and the Cambridge Alternative Finance Center (CCAF) and the Zhejiang Internet Finance Association (ZAIF) of the Zhejiang University Internet Finance Institute (AIF), Among the top 7 financial technology centers in the world (30 in total), China is the only one in the world, and Beijing ranks first in the global technology finance center (FinTech Hub). (Figure 2 below)
Figure 2: Global financial technology landscape: Asia and the Americas lead, followed by Europe
Source: The 2018 Global Financial Technology Center Report
Compared with other countries, the rapid development of China’s financial technology, on the one hand, thanks to the promotion of technology, namely the rapid development of new technologies such as cloud computing, big data, blockchain, mobile internet, artificial intelligence, China Crossing the Western credit card stage, directly entering the mobile payment era; on the other hand, thanks to China’s huge population base and hundreds of millions of people’s rich application scenarios, financial technology and related service areas have access to a large number of user preference data, and quickly The natural advantage of optimizing products and improving user experience. Today, China’s mobile payment ratio has reached the highest level in the world.
Not only that, in the world, China’s six major cities – Hangzhou, Shenzhen, Guangzhou, Beijing, Shanghai, Nanjing, become the world’s financial technology in the field of payment, wealth management and market lending, the most advanced consumer experience The first 6 cities. (Figure 3 below)
Figure 3: Financial technology consumer experience: China leads, Hangzhou ranks first
Source: Global Finance Section, 2018Technology Center Report
In summary of the information, it is not difficult to draw conclusions–The domestic financial technology market has entered a mature stage, and the head array of each major track has been “bigger to eat”, and the user’s main usage scenarios are basically Highly permeable. (Figure 4 below)
Figure 4: User penetration rate of China’s major financial technology sectors in 2013-2020
Source: Analysis of market conditions and development trends of China’s financial technology industry in 2019
However, except for the “Financial Technology Top 50” companies we saw in Figure 2, China has registered tens of thousands of financial technology companies from 2013 to 2017 (see Figure 5 below). What is even worse is that domestic small and medium-sized financial technology companies, compared with BigTech companies such as Ali, JD, and Tencent, still have a big gap in their strength in sea.
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First, these BigTechs use their emerging technologies, large customer data, and actionable insights to understand and predict behaviors and needs, and have actually redefined all industries, including financial services. Customer experience;
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Second, unlike Fintech, BigTechs has a large customer base and huge cash reserves, which provides a more reasonable and easier way to expand its business.
China’s tens of thousands of Fintech companies, in the face of the domestic “Red Sea” market, how to highlight the encirclement, or even save themselves?
Figure 5: Changes in the number of Fintech companies registered in 2008-2017
Source: China Financial Technology Enterprise Database
“New Domain” can be traced
Going to the sea, the inevitable choice.
In 2018, the anxiety of “flow dividends have been exhausted” forced a group of companies to embark on the road to sea. China’s FinTech companies are also members of the sea. More and more Chinese financial technology companies have begun to actively embrace the national market along the “Belt and Road”, especially in the Southeast Asian market, and strive for international business.
In June this year, at the seminar on “Development Opportunities and Regulatory Environment of Financial Technology in Southeast Asia”, Zhang Chenghui, former director of the Financial Research Institute of the Development Research Center of the State Council, said: “China’s financial technology companies go to Southeast Asia for mutual benefit. For Southeast Asian countries, attracting Chinese companies can not only improve the capabilities of Fintech in the country, but also enhance the level of inclusive financial services in the country. For Chinese companies, the domestic regulatory environment is harsh, using the funds and talents accumulated in the early stage. Technology can open up a channel to go out and get a broader development space.”
The market signal is undoubtedly clear, but the Southeast Asian market has long been occupied by mutual gold giants. In the case of Alibaba, Ant Financial has promoted online financial services in Southeast Asia as early as 2013. (as shown below)
Alibaba’s Southeast Asian Financial Technology Market in 2013-2017
However, according to the 2018 Alibaba financial report, Ant Financial’s annual global active users broke 870 million. Of the 870 million users, 700 million are from domestic users. In other words, global scope, the market share occupied by Ant Financial is far less than imagined. In addition to the Southeast Asian market, there is still a large gap in the entire overseas financial technology market waiting for China’s small and medium-sized financial technology (FinTech). Enterprises enter and explore opportunities.
In the near future, Ernst & Young (EY) released the latest “Global Financial Technology Adoption Index 2019”. The report was conducted in 27 major countries and cities around the world. The study found that 64% of consumers around the world are willing to adopt FinTech, and 96% of consumers know at least the financial technology services of transfer and payment (see Figure 6 below). Figure 7), three-quarters of consumers have used money transfer and payment-type financial technology services.This means that financial technology is moving towards “democratization” on a global scale – a new generation of consumers are ready to use Fintech products in various fields.
Figure 6: Global Consumer Adoption Rate (1)
Source: “Global Financial Technology Adoption Index 2019”
Figure 7: Consumer Finance Technology Adoption Rate in 27 Markets
Source: “Global Financial Technology Adoption Index 2019”
Not only that, according to a survey conducted by PricewaterhouseCoopers (PwC) in 2017, based on 1308 CEOs (ceo), directors/department heads, IT/digital from 71 countries and 6 regions /Technical Supervisor and other top executives involved in strategy and innovation, PwC released the 2017 Global Financial Technology Report. There are two key pieces of information in the report that deserve special attention:
· More than 80% of global business representatives believe that their business will be overturned by FinTech companies, and as many as 88% of existing business representatives are increasingly worried that their revenue will be snatched by innovators;
· 82% of business representatives said that in the next three to five years, they hope to increase their search for and mature FinTech companies.
In other words, financial technology has long been popular around the world and has become mainstream in many developed and developing countries.
In fact, the rise of Fintech has created an ecosystem around the world that has facilitated the collection of massive user and corporate data and established credible relationships with customers. Under such a trend, on the one hand financial institutions have realizedThe younger generation has formed a reliance on financial services such as convenient payment, online lending, and insurance brought by FinTech, and is trying to participate and introduce innovation into the company. On the other hand, for traditional entities in various countries, if they want to be subverted by the innovative Fintech enterprises and continue to earn income, they must adopt an effective growth strategy to accurately find financial technology companies that match their own businesses. And cooperate with it.
That’s why, as we have seen, in all countries, the vast majority of participants (average 82%) have a strong desire to find mature financial technology partners in the future. (Figure 9)
(The scale in the figure represents: the possibility that respondents believe that the entity may be subverted by financial technology in the next 5 years)
Figure 8: The possibilities and trends of financial technology to subvert entities
Source: PricewaterhouseCoopers (PwC), Global Financial Technology Report 2017
Figure 9: Proportion of current and expected partnerships with financial technology companies in each country
Source: PricewaterhouseCoopers (PwC), Global Financial Technology Report 2017
The hopes of China’s small and medium-sized fintech companies are also here – even if the Southeast Asian market has long been occupied by mutual gold giants, there are still many opportunities to be tapped around the world. The vast market “new domain” can be explored.
Not only that, because Chinese companies have advanced technology in the field of financial technology (Fintech), and have rich experience in user service experience design, have absolute advantages, phaseCompared with the domestic market that has entered the stage of incandescence competition, if it can “precisely land” and go to the international market with more demand, it will be able to present a “sudden army”.
But the question is, how do you find these opportunities accurately? Where do you discover the value of the “new domain”?
Challenging – Accurately target users, low cost landing, high efficiency promotion
As mentioned earlier, compared to AliTech, JD, Tencent and other BigTechs, China’s small and medium-sized financial technology (Fintech) companies are familiar with the “overseas” market, although they have mature technology. The lack of user-specific scenarios, cultural habits, regulatory mechanisms, legal policies and other figurative and clear information have become the core obstacles for companies to accurately land, quickly seize the market or find matching partners.
Of course, the vents are fleeting. In this “unfamiliar” situation, the cost of trial and error is extremely high. In addition to huge cost and carpet placement, is there any other way out? On the way to the sea, how can China’s small and medium-sized financial technology (FinTech) companies “take advantage of strength” and “four or two” to achieve rapid landing, so that their products can reach target users or corporate customers efficiently and accurately?
International large Bigtech companies with “large user base + data analysis capabilities” may be a high score answer.
For example, Facebook, has more than 2.23 billion users worldwide (users account for a quarter of the world’s population), and the number of monthly users is twice as high as that of WeChat. It almost captures most of the non-working hours of each user’s day (see Figure 10 below).
Facebook and its products not only have have a large number of user information, but also through the technology of big data analysis, to accurately grasp the user image with “local” characteristics and to locate the needs of enterprise users.
Figure 10: Social media such as Facebook, live users
In China’s tens of thousands of small and medium-sized (FinTech) companies, going to the sea is undoubtedly the best choice. However, due to the inability to accurately reach the target users,If the policy is not clear, and you cannot achieve scale expansion, you may try to find a “high leverage” like Facebook to realize the efficient realization of limited resources.
With the help of “high leverage”, what can China’s small and medium-sized technology innovation (Fintech) companies get? If you are interested, Welcome to continue reading the long picture below to learn about Facebook-
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How to redefine the consumption journey of the future consumer powers – Millennials and Generations Z;
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How to tailor a refined marketing funnel for FinTech companies, use text, images, and videos to reach users and empower products to awaken users’ brand awareness;< /p>
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How to help Fintech companies achieve a turning point in scale, break through the conversion ceiling, enhance user retention, and drive business growth.
If your friends around you are engaged in financial technology, you are welcome to share the long map to TA.