Recently, a number of consumer finance companies have disclosed the first half of 2018 financial results. In terms of financial results, compared with the first half of 2017, the performance of some consumer finance companies increased significantly in the first half of this year, and many companies were profitable. Among them, the net profit of 23/45th was 614 million yuan, zhaolian consumer finance 604 million yuan, Jiimang consumer finance 366 million yuan and Haier consumer finance 60.91 million yuan, with year-on-year increases of 35.5%, 11.6%, 173.13% and 238% respectively.
It is well known that the consumer finance industry has entered the wave of layoffs since the introduction of strict regulation at the end of last year, and some consumer institutions have started to reduce their business. From the performance of the first half of this year, it can be seen that the business of some formal consumer financial institutions has not been much affected, but ushered in the dawn of development.
But the era of consumer finance has not passed, and some players are still in hot water. For example, In 2016, The bank of China Consumer Finance changed from profit to loss, with a cumulative loss of 1.4 billion yuan in two years. Also recently, U.S. -listed Sinofortune reported a total loss of $10.591 million through the second quarter of 2018. This has been the third consecutive year of losses for The letter and rich.
Visible, the consumer finance industry has continued to divide. And cause the reason of loss of some enterprises, there is a huge fine due to poor management, there is a drop in revenue due to the increase in investment costs……
On the other hand, consumer finance players, such as instant consumer finance, are not enjoying a smooth road to explore.
Rising research and development costs
It is said that 2016 and 2017 will be a blue ocean period for the development of consumer finance. By 2018, as the regulatory intervention, late last year after a series of consumer finance industry reshuffle, blue ocean industry undoubtedly has become the past, replaced by a variety of tending to the development of the negative information: consumer finance is in development stage, should consumer finance lying “make money” time has gone…
But licensed companies such as Instant Consumer Finance have seen rapid growth.
Data show that as early as the second half of 2016, immediate consumer finance has turned into a profit, with a net profit of 6.52 million yuan. Since then, its revenue has been growing, with transactions of 70.1 billion yuan, outstanding loans of more than 30 billion yuan and profits of 578 million yuan in 2017. In the first half of 2018, the revenue accelerated comprehensively, reaching 4.107 billion yuan, with a year-on-year growth of 229.38%, accounting for 90% of the annual revenue in 2017.
Tempting results seem to reveal that consumer finance is a popular industry, but in fact, consumer finance is also facing high research and development costs.
Regulation is a universal driver. Since the regulatory intervention, many mutual finance platforms have begun to “self-reflect” and removed all kinds of non-compliant products. After the market returned to order, many unreasonable products, such as long lending, were restricted outside the industry door. In addition, they have shifted from financial services to technology-based development. Even consumer finance companies have begun to attach importance to technology export and increase investment in scientific research and development.
Indeed, consumer finance is becoming more mature than it once was. There is no doubt that this will be an era of technology as the home field and core competitiveness.
The trend is driving companies to grow, and increasing research and development costs has become an unspoken consensus among Mutual finance companies. Immediately consumer finance in technology research and development, also invested a lot of effort. It is understood that in the first half of 2018, the investment in research and development costs as much as 200 million yuan. Since its establishment three years ago, instant Consumer finance has invested only over 400 million yuan in R&D.
Obviously, in the process of increasing investment in science and technology, mutual gold industry does not dare to neglect, once a slow step, it seems inevitable to be eliminated. But will transformational technology output platforms have an easier time? The reality is that some technology output platforms in Mutual Finance industry, which were still trying to expand their sales teams at the end of last year, are now cutting back to cope with the winter of business contraction. The rapid change of the industry is surprising. It is reported that in the past two months, a large number of risk control technology output platforms have taken the initiative to seek cooperation from small and medium-sized banks. However, due to the lack of sufficient financial strength and other factors, only a few have realized cooperation.
The reality is that the remaining institutions need adequate funding to sustain their growth.
Escape from the line, high complaint rate
Since the end of 2017, many consumer financial institutions have started to increase their capital.
For example, in December 2017, the registered capital of Huarong Consumer Finance increased from 600 million yuan to 1.6 billion yuan; In January 2018, Zhailian Consumer Finance increased its registered capital from 2 billion yuan to 2.86 billion yuan; China Post Consumer Finance also proposed to increase its registered capital from 1 billion yuan to 3 billion yuan. Instant Consumer Finance is no exception. It just obtained 2 billion yuan of new strategic financing in July, and its registered capital also increased from 2.21 billion yuan to 4 billion yuan.
Why did increase capital become the inevitable action of these consumer financial institutions? The following factors are indispensable: first, leverage is controlled to meet regulatory requirements; The second is to increase the scale of lending institutions to do a good enough capital reserve; The third is to enhance the industry competitiveness of the institutions involved.
In addition, the rising cost of doing business in the consumer finance sector may also be the reason for the capital increase.
“Sea of people tactics” also does not work, this sentence applies to all the offline focus of Mutual finance business institutions, including the offline 3C installment, home appliances, home decoration and other fields have business involved in immediate consumer finance. Why? It is obvious that the cost of acquiring customers and the cost of labor are becoming increasingly high. In addition, the price war of some zero-interest products in the early stage has made the profits of enterprises become thin… The offline world is offering a gory reminder that evacuation may be the best option.
Instant consumer finance has not been able to get rid of this magic spell. Last year, it showed signs of withdrawing from offline business and began to promote online loan products such as “instant loan” and “Comfortable spending”, while offline 3C installment is no longer its business focus.
Obviously, the heavy offline mode needs to pay high operating costs, so that many enterprises can not bear, the front-end sales staff, the former performance of xiangbobo, has now become the burden of the enterprise, the industry has to choose to survive. Not only that, even the cost of collection is also high.
There is no doubt that in the face of stronger predators, the only way out for instant consumer finance and other mutual gold platforms is to follow the market trend and seek more segmentation scenes. After all, in the current consumer financial market, the trend of customer segmentation is becoming increasingly prominent, and financial products are naturally becoming diversified. In order to meet the financial needs of different customer groups, enterprises have to open up a variety of business channels to serve more user groups.
This capital of the game, on the hand of the point of capital strength of the enterprise is really difficult to accompany.
Who would have thought that instant consumer finance, with its soaring performance, also ranks high on the complaint list? According to the Internet consumer finance complaint ranking released by 21CN Jucomplaints, instant consumer finance ranked second in the number of complaints in the first half of 2018, with 2,855 effective complaints, second only to Wecash Flash Silver. This “list” has become one of the most criticized points in immediate consumer finance. Consumer finance has a lot to improve if it is to achieve good results.
In a word, in the face of increasingly brutal market competition, consumer finance has achieved good development results, but there are still many thorns in the industry in front of hindering the advance of institutions in the industry.
Trend: The era of risk control is coming, and online and offline joint drive has become the mainstream
On the whole, the current development of consumer finance reflects not only the rising cost of capital in the consumer finance industry, but also the omen that the living space of consumer financial institutions is not enough, all of which result from the intensified competition in the industry. Since 2018, the trend of mortgage tightening has become increasingly prominent. In order to seek more development space, banks have added consumer finance, which has indirectly deepened the intensity of competition in this field.
As competition intensifies, consumer finance is also facing two major trends:
First, the era of consumer finance risk control is approaching step by step. Combined with the previous analysis, consumer finance has shifted from the home of finance to the home of technology, and the core purpose of financial institutions to improve the technical ability is to improve the risk control ability of the platform. Judging from the current development, the combination of Internet consumer finance and technology has not reached the expected height, and the desire of technology to comprehensively reduce marginal service costs has not really been achieved.
Specifically, at present, the risk control ability of many consumer finance enterprises is still in the stage of exploration, and it is basically “one step at a time”, and truly suitable for enterprises has not been developed. Therefore, in addition to preparing for long-term exploration, practitioners of consumer financial institutions also need to make great efforts in refined operation to adapt to the trend of consumer finance with more and more diverse service groups.
Second, online and offline joint development into the mainstream. There is no doubt that in order to seize more guest space, mining high-quality scenes has become a hot topic of consumer gold enterprises. In view of different online and offline customer acquisition costs, as well as different financial needs of users, many consumer financial institutions are creating a development model driven by both online and offline, providing users with all-around consumer payment services.
In this regard, the traffic advantage of online scene is basically in the hands of several Internet giants, which also increases the cost of acquiring customers, which is a big test for the industry institutions lacking innate online advantages. In the offline scene, the landing scene is basically occupied by people, which has already dyed the field into the red sea. It is not wise to enter the game at this time. Although some new scenarios are gradually developed, such as credit lease and employee loan, these new scenarios have more or less difficulties in landing and are difficult to easily enter the game.
However, from the point of view of user demand, those offline scenes with strong experience can not be ignored, and the convenience of online services is also a big advantage to attract users to stay. In order to integrate advantages, the focus of the future gold elimination enterprise layout will be the combination of online and offline development mode.
On the whole, the consumer finance industry will continue to grow in the future with the increasing release of consumer credit demand and the great improvement of Internet consumer finance service efficiency by fintech. And immediately consumer finance in the first half of this year to hand over this satisfactory answer, the later can continue to write brilliant, depends on their own can break through these industry bottlenecks. As for when the consumer financial ecology expected in the industry will take shape, it is still a long waiting process.
Article/Liu Kuang public account, ID: Liukuang110