The 9F Group, one of the biggest fintech companies in China with nearly 70 million registered users, is eyeing the Indian market. Armed with their virtual credit card One Card and partnerships with JD.com and Netease Yanxuan, 9F has played a big role in creating the ecosystem in China for e-commerce, credit and personal loans.
Last year, 9F launched in Indonesia, Thailand, Philippines and Vietnam, partnering with local banks and fintech companies to deploy the technology and experience they have accumulated in the Chinese market. Now they plan to meet Indian startups.
When George Jin, vice-president of 9F Group and CEO of One Card, participated in the India-China Fintech Summit hosted by The Passage, he said they found the highly-regulated Indian market exciting as everyone would have to play by the same rules. They prefer this over “taking a step forward and going two step backwards”.
Jin and his colleague Lai Han Sheong, senior director of international business development, speak to The Passage about the ecosystem 9F has built in China, their performance in southeast Asia and theirs plans for the global market in 2019, especially in India.
TP: Can you brief us about 9F’s ecosystem in China?
9F: We have created a mature ecosystem in China with almost 70 million registered users. Our main product is the personal line of credit, kind of open-ended and longer-term (one to two years), which you get access to with a OneCard account.
Once users have the account, they can use it buy things and do their payments in installments. It could be medical or cosmetic expenses, for example, which can be quite high. They can repay it over six months, even 12 months using the 9F OneCard. We call it the virtual credit card, basically a revolving line of credit. We have own credit score that we internally develop, and the interest and repayment terms are determined based on the score.
TP: How about the product categories?
9F: The products range from medical, cosmetic, renting, education, travelling, etc. In China, the top three categories in terms of volume are travelling and entertainment, furniture, health and medical care. These collectively become our ecosystem. For example, in places in China, people have to pay three months’ rent in advance, plus a deposit, so it is quite heavy. We partner with several rental portals to provide the loan. We also partner with corporations, like Spring Airlines.
TP: Do you also provide cash loans?
9F: In China, we provide long-term cash loans, at least for 12 months. If you talk about the average ticket size, consumer loans are much bigger and for a longer duration. But when you talk about the number of customers, the cash loan is much bigger. So we cover a lot and have built a large ecosystem in the last 12 years by working with different partners.
TP: What, apart from lending business, do you deal in?
9F: Lending is just one or part of our ecosystem. We also have wealth management. We have about 35 million registered users for wealth management, that’s also a big part, and they don’t overlap a lot with the lending population. We also have financial tools that help customers manage their finances. We also provide credit scores for banks, help them do their own decisions for their credit card business.
TP: When did you enter southeast Asia and how is the business working out?
9F: We have launched in Indonesia, Philippines, Thailand and Vietnam. In terms of the growth of our app, for example, in Indonesia we got more than 50,000 users registered in a month. We are partnering with different companies to provide products in SEA, mostly short-term loans for one to six months. In Thailand, we are partnering with a bank to develop some consumer products, and with another public company we are developing an unsecured personal loan product. It will take several months to build it.
For Indonesia, our partner provides the lending license. We do most of the heavy work. We developed the app, we provide a credit engine, do the collection and they take care of the customer support. We are not just a technology provider, we are also doing our own finances. We supply the lending capital as well, but we share with them what we call the ‘platform feet’. But in the future, we are open to other institutional funds.
TP: How do you see the Indian market?
9F: I think India is a huge and promising market, and we would like to be a part of this growth. We are looking at it from a collaboration point, if not directly enter the market. We see that the Indian market is similar to what saw in China in the last five years. I think five years from now, it will be totally different. We are here to share our knowledge, and we hope to grow together with our local partners or, potentially in the future, it could be banks as well.
In terms of e-payment system, India just launched the UPI, the infrastructure is ready. Technology can really make a huge difference, but it’s only when the infrastructure is ready. Sometimes you just have to wait for the right environment.
TP: How different is your strategy for overseas markets as compared to the Chinese market?
9F: Our strategy has always been technology. It is in our DNA. It's just that different countries have different situations and regulatory rules. We started by helping banks, we used to consult banks to tell them what they should do to retain customers. The ecosystem takes time to build. Based on our experience in southeast Asia, we think technology is easy to copy, you can deploy and adapt it to local needs and situations.
TP: How do you see the regulation in India?
9F: I think the regulatory environment is better here. For example, India is very cautious when it comes to peer-to-peer lending. We like it because it sets up the boundaries for you, to play by the rule. It’s better for us to have a guideline of what we can or cannot do. Without regulation, it may be like one step forward, two step backwards. We want to move steadily.
TP: What do you think about the competition in India compared to other markets?
9F: The Indian market is very competitive compared to others. Obviously, you have Chinese companies coming in already. Like what CEO of NPCI, Dilip Asbe, said, even for payment companies there are more than a 100 startups already. India is much bigger than southeast Asia, in terms of GDP, operation size, as well as the potential. There potential is here, but the partnership is like a marriage — you meet with girlfriends, but you have to pick the right one for you to get married and have a long-lasting marriage. It’s not that easy.
TP: What is your overseas market plan in 2019?
9F: I would call it a global strategy rather than an overseas strategy. We have been building this ecosystem in China, then we tried a little bit in southeast Asia up and it’s been welcomed.
Our strength is our technology, not the financial arm. Our executive group has come to a similar conclusion. So I (Jin) was appointed the head of 9F technology group, previously all my focus had been on the OneCard product in China. Now I’m travelling across the world to find out what other technology needs we can fulfil with different countries. In my team, we have about 200 people for technology — data scientists, AI specialists, blockchain specialists, etc. We also have a lab in Silicon Valley.
Technology-improved financial experience is a reality. If you go to Chinese banks, you only see the older generation. The bank opens only two windows and they have a lot of automatic machines. The world is becoming smaller and the physical boundaries are bound to be broken. That’s where the technologies come in to help, that’s what we want to do.
The question would just be who becomes the dominant player in this space. Whoever it is, we hope we can grow together with them, that’s our strategy. I am very excited, very positive. It’s good for the world that India and China can grow rapidly in the future.