Home Appliances Retail Sets into Financial Industry

Home Appliances Retail Sets into Financial Industry

Following Guomei’s shareholding in Huishang Bank, Suning Yunshang quickly made efforts to join the “home appliance consumer finance” war situation. According to the latest news, the China Banking Regulatory Commission (CBRC) has recently approved the "Consultation for the preparation of Suning Consumer Finance Co., Ltd." and agreed to establish Suning Consumer Finance Co., Ltd. in Nanjing, Jiangsu Province. Affected by this news, Suning Yun Shang pulled up the afternoon session, the stock price rose 2.52% to 9.36 yuan. However, the person in charge of the Suning cloud business executive said to the South, not to comment, subject to the company announcement.

"Suning Bank" fetal movement

Suning's desire to enter the banking industry has been long-standing. On August 23 last year, Suning Yunye issued an announcement confirming that the company had applied to the relevant departments for the establishment of a private bank and registered the domain name “suningbank.com”, and plans to launch a corresponding fund to pay for product and fund e-commerce platforms.

However, over the past period, regulatory approvals have been relatively cautious for consumer finance, and private banking licenses have been relatively scarce. Or because of this, the establishment of the Suning Bank "only heard the stairs ringing, but no one came down." Turnover took place in September last year. The China Banking Regulatory Commission amended the "Procedures for the Pilot Management of Consumer Finance Companies" to allow private capital to initiate the establishment of consumer finance companies, announced the addition of 12 cities for consumer finance pilot companies, and expanded all pilot cities to 16.

“This new regulation will cause a large number of private capital to set up consumer finance companies to remove obstacles in their policies.” Xiong Wangao, co-founder of the Guangdong Southern Financial Innovation Research Institute, explained to Southern Reporters that retail companies have a natural advantage in consumer finance, and borrowing from e-commerce companies. The channels will also greatly reduce the original operating costs of consumer finance companies.

It is widely reported in the industry that the China Banking Regulatory Commission has recently approved the "Consultation for the Establishment of Suning Consumer Finance Co., Ltd." and agreed to establish Suning Consumer Finance Co., Ltd. in Nanjing, Jiangsu Province. The person in charge of Suning Cloud Business said that he would not comment, "according to the company's announcement." Zhao Hui, the general manager of Zhaoye Business Consulting Co., Ltd., told Nandu that consumer finance companies that are generally approved for construction should already have consumer loan licenses. If the news that Suning plans to build a consumer finance company is true, then Suning will own the consumer loan license.

Yesterday, reporters from Southern Capital learned from the first batch of foreign consumer finance companies, Credit China, which received a consumer finance license. Suning currently cooperates with Gitzo, and Gitzo provides service personnel to serve in Suning to provide consumer credit services.

Different paths

In the eyes of the industry, Suning has set up a financial consumer company itself, and the greater room for development lies in its possession of an online market. This piece of the market has been initially formed, such as "Jingdong white bars", "Tmall phase" of such stages of products are actually part of consumer finance products.

According to iResearch's data, China's Internet consumer and financial market transactions reached RMB 6 billion in 2013. It is expected that the scale of China's Internet consumer financial transactions will exceed RMB 16 billion in 2014, a growth rate of over 170%. By 2017, the overall market size will exceed 100 billion, and the compound annual growth rate will reach 94% in the next three years.

Xiong Wangao believes that in the past, some e-commerce companies needed to cooperate with banks in consumer finance, but once they had a consumer finance license, the business could do it on their own. After Suning entered, large retail e-commerce companies are expected to follow up.

In fact, GOME’s CFO Fang Fang also revealed to Southern Reporters that “Gome currently does not have a consumer loan license, so it is necessary to join hands with the bank to complete the Gome’s financial license layout.” However, insiders from Gome disclosed to Southern Reporter that the stake was in the stock market. After the Commercial Bank, Gome has been plotting to launch a "joint credit card."

In addition, both the Tmall phase and the Jingdong white bar bypassed the minefields of credit payments. The former is funded by small loans. Consumers can choose 3-12 installments to purchase goods, and then Ali will use the goods to transfer funds. Once paid to the merchant in full, the consumer then pays instalments to Alibaba, who manages his account receivable period.

There are various signs that consumer finance may become the "backroad" of electrical retailers. Liu Hui pointed out that from the perspective of the retail industry in developed countries, the retail industry does not make money, mainly relying on consumer credit to make money. For example, a retail company's products are sold at or near the ex-factory price to consumers who need credit to generate handling fees or loan interest. At present, the JD IB rate is divided into 3 periods (1.5%), 6 periods (3%), 12 periods (6%) and 24 periods (12%). The Tmall purchases are divided into three grades, 3, 6, and 9 with rates of 0, 4.5%, and 6% respectively.

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