This is part 2 of our research into Chinese Market Place Lenders. Part 1 is here.
Ppdai is credited with being the first MPL (then called P2P Lending) in China, following close behind pioneers in UK and USA. Since then, literally thousands of platforms emerged. This is clearly unsustainable. Market Place Lending is a networks effects business. More borrowers lead to more lenders and vice versa. So the thousands of MPL platforms in China has to come down to a handful of companies.
Top of the Pops
The top 20 platforms as tracked by Wangdaizhijia and reported by Lendit are:
| 1 | Hongling Capital |
| 2 | Lufax |
| 3 | PPmoney |
| 4 | Wzdai |
| 5 | Weidai |
| 6 | Xinhehui |
| 7 | Yooli |
| 8 | Jimubox |
| 9 | Jinxin99 |
| 10 | Renrendai |
| 11 | Srong |
| 12 | Yirendai |
| 13 | Xiangshang360 |
| 14 | Edai |
| 15 | Niwodai |
| 16 | Touna.cn |
| 17 | Eloancn |
| 18 | Qianbaba |
| 19 | Itouzi |
| 20 | Tuandai |
Source: Wangdaizhijia
The only names that resonate in the West are Yirendai (because they did an IPO in America) and Lufax (because they are publicly mulling an IPO in Hong Kong). Lufax is being valued almost 10x Yirendai and ranks second place vs 12th for Yirendai. So Yirendau could be like Ondeck vs Lending Club, first out of the IPO gate but small compared the market leader and it may be acquisition bait during the consolidation phase.
The IPO process for Lufax may bring a) capital b) more mature processes (due to public scrutiny) and c) consumer name recognition. For the latter, the Hong Kong venue for Lufax makes the most sense.
Here are the top 3 ranked by Transaction Volume:
| Company | Transaction Vol | No. of borrowers | |
| Hongling Capital | 300,401 | 3,944 | |
| Lufax | 137,250 | 24,984 | |
| PPmoney | 130,909 | 5,506 | |
Here are the top 3 ranked by No of Borrowers:
| Company | Transaction Vol | No. of borrowers | |
| Xiangshang360 | 46,872 | 30,497 | |
| Luffa | 137,250 | 24,984 | |
| Weidai | 83,250 | 11,550 | |
(Yirendai is 4th).
Note LUFAX in second place on both scores. If their IPO in Hong Kong goes well, they look like a strong contender.
What role will BAT (Baidu Alibaba TenCent) play?
These are behemoths by any definition. In simple market cap terms (rounded to nearest $ billion as of Oct 2016):
Baidu = 61
Alibaba = 263
TenCent = 258
In comparison Lending Club = 2 and Lufax (pending IPO) = 18.
How much these giants want to get into Lending is the key question. All three have launched online banks, with Baidu the most recent into the game.
So, we can expect plenty of excitement as the MPL market in China matures.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech & operates the Fintech Genome P2P Knowledge platform.