Emerging Eight Draughts of Internet Finance, Each being Expected to Have a Market Value of Thousand

Emerged in theyear of 2013, Internet finance is approaching to the fourth year of its boomingdevelopment in the year of 2016. The brutal way of development will beabandoned in the upcoming industrial reshuffle and will be in the industryreshuffle abandoned, and reverence for internet finance will become the mainmelody of the year of 2016.

Shen Nanpeng saidif we rank the emerging industries which enjoy rapid growth and the largestmarket potential, Internet finance will top the list. However, BAT (Baidu,Alibaba and Tecent) and other big companies have completed layout in thissector and positioned Internet finance as significant strategy; unicorn companyhas emerged in P2P internet borrowing platform, consumption finance and other financialareas, is there still chance for startups? The answer is yes. The draughts ofinternet finance are just emerging.

Emerging Eight Draughts

"Trillion-grademarket" sounds like a big number, but there are several “Trillion-gradeMarket” in the segment of Internet finance. The flourishing eight segments ininternet finance in 2016 include auto finance, online small amount borrowing,Internet insurance, private equity financing, big data credit, high-end wealthmanagement, disposal of non-performing assets and internet securities.

Draught 1. When Auto Finance Meet With Internet

The traditionalauto finance company refers non-banking financial institution which isestablished in accordance with approval from China Banking RegulatoryCommission and provide domestic auto purchasers and sellers with financialservices. By the end of December 2015, there are 23 automobile financialinstitutions.

The central bankstatistics show that in 2014 China's auto finance market has exceeded RMB 700billion; the compound annual growth rate from 2012 to 2014 overtaken 33.6%;auto finance penetration has exceeded 20%. At present, the auto financialmarket is expanding at an annual rate of 25%.

Draught 2. Online Small Amount Borrowing

Traditionalconsumer finance companies refer to non-banking financial institutions that areestablished within the territory of the people's Republic of China subject tothe approval of the China Banking Regulatory Commission, do not absorb publicdeposits, and adhering to small and disperse principle offer loans to residentindividuals within the territory of the people's Republic of China for thepurpose of consumption. There are 11 approved consumer finance companies inChina.

Draught 3. Internet Insurance – Great Draught of GlobalFinancial Technolgoy

CIRC data showthat in 2014 the Internet premium income was RMB 87 billion, an year-on-year increaseof 195%. The Internet insurance market has a bright future and 2016 willwitness a flourishing scene in this sector.

The majorparticipants of Internet insurance market include the traditional insurancecompanies who apply internet sale of insurance, Internet sales platforms,Internet insurance companies, Internet insurance startups. In the year of 2015,there landmark financing events took place –Instony.com launched by travelinsurance company, zhongan.com launched as an internet insurance company and theentrepreneurial company Wukong insurance.

Draught 4. Private Equity Financing (Equity Crowd Funding), CompetingAmong Financing, e-Commerce and Entrepreneurship Parties

2015 is a year ofnormalization of public equity raising industry. Premier Li Keqiang repeatedly highlightedpublic entrepreneurship and grass root innovation. Driven by policy promotion,there are 186 crowd-funding platforms of this kind have launched online byOctober.

Besides startups,internet tycoons also join the wrestling. At the end of March, Jingdong "Dongjia"was launched, when on the same day, Shenzhen Qianhai Public BeneficialCrowd-Funding was established with investment of RMB 100 million Ping An Group.In April, Suning Crowd-Funding was set up. China Merchants, Jun ShengInvestment and other PE are preparing equity crowd funding platform.

Draught 5. Big Data Credit Investigation - the FledglingInfrastructure Market of Credit

On January 5 thisyear, the central bank issued Notice In Regard of Preparation Work for Carryingout Personal Credit Investigation Business. According to the Notice, Tencent Credit,Sesame Credit, Shenzhen Qianhai Credit, Pengyuan Credit, Zhong Cheng XinCredit, Zhong Zhi Chengxin Credit, the Koala Credit, Beijing Huadao Credit are allowedto carry out personal credit business preparation work; in addition, many companieswho possess huge data and strong technology infrastructure are secretly layout thebig data credit market. 30 enterprises including Baidu, Jingdong Finance, Xiaomiand Yixin intend to apply for the second batch of personal credit business license.Besides, third party technology and service suppliers in connection with bigdata credit business are emerging.

Draught 6. High-end wealth Management – On the Early Stage OfA Combination Of Online And Offline

The wealth managementscale of China's joint-stock commercial bank is more than RMB 1 trillion; thescale of big firms like ICBC usually exceeds RMB 10 trillion. By the end of2015, with high confidence on wealth management market, Peer-to-Peer Lending, atraditional P2P platform, transformed to a one-stop wealth management platform.

Draught 7. Disposal of Non-Performing Assets: WhenNon-Performing Assets Encounters Internet+

Under theoverwhelming Internet wave, "Internet + Non-Performing Assets" has becomea popular draught. The big four asset management companies (Xinda, Dongfang,Great Wall and Huarong) has begun to dispose of bad assets through theInternet. In March, China Cinda Asset Management Corporation has disposed twonon-performing assets on Taobao Asset Disposal Platform through public bidding;on December 15, China Huarong Asset Management Corporation announced that it officiallysettled on Taobao Assets Disposal Platform.

Draught 8. Internet Securities

Although in the year of 2015 the stock market in China experienced vehementfluctuation, internet securities still become a draught in 2016. Four trends ofthe security industry in the year of 2016 are expected to be big data,artificial intelligence, precision marketing and fine operation. But domesticInternet companies are far behind in development in terms of these four trends.