BankTech

The Market of Unparalleled Opportunities

MEDICI

The world’s economic and political landscape is rapidly changing with unexpected shifts taking place sometimes. With opportunities at a question in once-promising markets, bright entrepreneurs should be ready to enter the new doors opening in their path. One of those doors is the APAC region holding a promise of earth-shattering success for innovators that are ready to embrace opportunities.

The APAC region has long been a massive and advanced consumer market ready for innovative solutions to take it by storm. Even with certain challenges for APAC startups being in place, the region is leading the global mobile payments industry in addition to being a hotspot for FinTech investments overall. Indeed, in 2015, total investments in the industry quadrupled, reaching $4.3 billion.

China: A fertile ground for innovative technology and unparalleled growth opportunities

A particular country that is almost solely responsible for a significant part of the total investments – almost $2 billion – is China. In Q1 2016, FinTech investments in the APAC region have grown by more than 500% compared to the same period last year (from $445 million to $2.7 billion) and China is reported to be almost solely responsible for the growth.

Eye-popping investments in China’s market are not ungrounded. With 1.35 billion people populating the country, more than 50% of smartphone penetration and almost 90% of smartphone users in the country having access the global Web through mobiles, it is difficult to underestimate the opportunities for mobile/online-focused businesses.

One of the pillars of China’s firm foundation in the modern economic landscape lies in the country’s rate of connectivity on the global Web. Some of the recent estimations suggest that China’s internet economy revenue hit 265.45 billion Yuan in Q2 2015 with QoQ growth of 23.1%. Interestingly, a paper published at the beginning of 2016 reveals that significant part of the revenue comes from content, products, and services of Western origin with demand expected to remain strong for many years.

The Internet, e-commerce and & P2P lending market as no other

China is reported to be the #1 Internet market in the world with more than 674 million Internet users, 200 million broadband users and an Internet penetration rate of 49.5%.

With regard to financial services, the country’s digital banking customers are expected to triple by 2020, reaching 900 million. Moreover, China is one of the Asian economies breeding the highest number of HNWI: with 4.7 million HNWI in Asia holding almost $16 trillion, India and China, in particular, are the number one and two fastest-growing pools of money in the region.

Not only China is the #1 Internet market, it is also now the largest P2P lender in the world with almost $66 billion lent out. And even though the total amount of loans lent through online platforms remain a very small part of the total market (less than 1%), China’s market is growing at a rapid pace — around four times the absolute size of marketplace lending in the US and over ten times the UK. By 2018, the Chinese P2P market is expected to be around 9% of total retail loans (for comparison, the US P2P market is just 0.7% and even by 2018, the penetration rate would only be slightly above the current Chinese level, which is estimated be at 3%.

Moreover, the country has the largest e-commerce system in the world with more than $670 billion (40% of the global volume) gross merchandise volume in 2015. By 2018, gross merchandise volume of the e-commerce systems in China is expected to hit $1.6 trillion. Estimations suggest that e-commerce shoppers in China are predicted to make online cross-border retail purchases totaling $157.7 billion by 2020, compared with this year’s estimate of $85.8 billion.

MEDICI Team

MEDICI

MEDICI Team is a group of content writers, bloggers, journalists, researchers, and editors from the MEDICI team who collaborate to create FinTech insights.

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