P2P nobody survived, mutual gold put on a new coat after the disaster

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By Cai Yue
Source: capital detective (ID: deep)_ insights)
Two years later, mutual gold launched another wave of listing, but this time, the protagonist changed.
On October 8, lufax, the eldest son of Ping An, China’s financial technology incubator for many years, formally submitted a prospectus to the US SEC to seek listing on the NYSE. This means that lufax will become the third domestic financial technology enterprise to be listed in 2020 after ant group and Jingdong Digital Technology Co., Ltd.
From the ant group on August 25 to Jingdong branch on September 11, and then to lufax on October 8, three financial technology enterprises “clustered” to go public in a short period of two months. According to the market forecast, the valuation of ant group listed in a + H may reach 280 billion US dollars, and that of lufax and Jingdong Digital Technology Co., Ltd. will reach 260 billion yuan and 200 billion yuan respectively, which can be seen from the market’s pursuit.
Three years ago, the companies that set off the first round of financial technology listing were equally prosperous at that time. In addition to the pleasant loan, which first landed on the New York Stock Exchange in 2015, xinerfu, qudian, Hexin credit, Jianpu technology, Lexin, 51 credit card, Weixin Jinke, HuiFu Tianxia and other cross gold star enterprises have chosen to go to the United States and go to Hong Kong in 2017 or 2018. The market value of some enterprises once exceeded the 10 billion dollar mark, and mutual gold industry has become the focus of attention in the capital market Star field.
But just three years later, the former scenery has turned into “a pile of loess”. The market value of qudian has dropped from a peak of 11 billion US dollars to less than 400 million US dollars now. The shares of Jianpu technology, xinerfu and other stocks have been reduced to fairy shares, and enterprises such as credit and micro loan network have been put on file for investigation for suspected illegal funds. Most of the first batch of mutual gold enterprises in the tide of listing were struggling, and they suspended or stripped off the online loan business in order to seek transformation.
The market will not pity successive participants, “prosperity and decline often overnight.”. Just when the first group of participants were undergoing a difficult transformation, another group of financial technology enterprises, such as ant group, Jingdong Digital Technology Technology Co., Ltd., and lufax, came with the new concept of “technology enabled Finance + platform based service”. Can the new story of mutual gold industry be told this time?
Building a tall building
When it comes to mutual gold, the two companies that cannot be bypassed are Lexin and qudian.
In 2013, Xiao Wenjie, who was the product director of Tencent, discovered during a campus recruitment that electronic product stores on campus would sell mobile phones to students by stages. He had a keen sense of business opportunities. He resigned at the end of 2013 and started staged music.
At the beginning of its establishment, stage music successively obtained investment from top investment institutions such as Xianfeng Changqing, Jingwei China, DST, Bertelsmann, etc. In 2014, staged music began to cooperate with Jingdong. The goods in the mall came from Jingdong, and the logistics and distribution were also provided by Jingdong. The business really began to take off and quickly realized the transaction scale of hundreds of millions of yuan per month.
On September 1, 2015, the single day sales volume of staged music exceeded 100 million yuan, achieving the highest single day sales of Internet consumer finance start-up companies at that time, and this achievement was less than two years after its establishment.
In 2017, stage music, renamed Lexin, was listed on NASDAQ
But the lead is to some extent used to surpass. In 2015, a company received $200 million financing from ant financial services, which became the largest financing event in the field of Internet Finance in China at that time.
Luo min and Xiao Wenjie, native of Jiangxi Province, were both born in 1983 and went to university in Nanchang at the same time. However, different from Xiao Wenjie’s career experience, Luo min is a typical entrepreneurial enthusiast. Before the establishment of interest staging, Luo min had started businesses nine times. Just after the ninth failure, Luo Min said that he wanted to join Xiao Wenjie’s Lexin. Xiao Wenjie told the whole story about the business model. Luo min turned around and founded the interesting stage in March 2014.
Interesting staging is famous for “fast”, which is also Luo min’s style. At the beginning of the project, Luo min met more than ten investors every week. Two weeks later, Luo min got millions of investment from Li Xiang, Wu Shichun, Chen Hua and Bao Yueqiao.
Both companies started with loan business, which is also the main business chosen by most mutual gold companies participating in the first round of listing tide. There is a certain era background for choosing this track.
Around 2010, due to the lack of corresponding qualifications, small and micro enterprises and individuals often could not get the loan services provided by traditional financial institutions such as banks, which formed a huge financial demand gap in China, and the first batch of mutual fund enterprises came into being.
Qudian and Lexin are the two fastest growing enterprises in the trend of this era, but they are far from the pioneers.
In 2015, Yiren loan was listed and became the earliest mutual gold enterprise in that wave. In an open letter to all employees on the day of listing, Tang Ning, chairman of the board of directors of Yiren loan, said, “Yiren loan firmly believes that” everyone has credit and credit has value “, which is an innovation in the concept of Inclusive Finance.
Yunus, the founder of Grameen Bank, is the pioneer of Inclusive Finance. Muhammad Yunus, a Bangladeshi, found that “the root cause of the poverty of the poor is not a personal problem of laziness or lack of wisdom, but a structural problem: lack of capital.” Later, he founded the Grameen Bank to provide credit services to the poor, which helped him win the 2006 Nobel Peace Prize.
Downing is a fan of Yunus, and the process of the rise of pleasant loan is similar to that of Grameen Bank. Huachuang capital, founded by Tang Ning in his early years, invested in a pre employment training company for college students called Danei. In order to solve the problem that students cannot pay tuition fees in one lump sum, the school allows some excellent students to pay part of the tuition fees first, and then repay them after working. This mode promoted the birth of pleasant loan to some extent.
Gu Shaofeng, founder of paipaipai loan, which was listed in the US stock market in 2017, is also a fan of Inclusive Finance. He started to implement the micro loan model in China in 2006 and founded paipaipai loan in 2007.

The name of the first mock exam is because the business started with the “auction” form to decide interest rates, but this model proved inefficient. For this reason, the auction has been tried out, but the risk control problem is surfacing again. The pat loan is forced to go back to the line, and it starts to independently do wind control platform and output technical data capability. This has become the first test for many mutual gold companies. Things to worry about.
However, no matter how tortuous the process is, hundreds of enterprises have entered the tide of the times and entered the mutual gold market.
Luo min, founder of fun staging, rings the bell at NYSE
The loan business mainly solves the problem of where the money comes from and to whom it is lent. There is no shortage of borrowers in China. When Lexin was founded in 2013, Xiao Wenjie was most worried about the rapid growth of business and too many borrowers. Where does the money come from? Under the premise of unclear regulatory policies, it is too difficult to discuss cooperation with financial institutions, and most mutual fund enterprises have turned to P2P mode.
P2P, the full name of peer to peer lending, that is, peer-to-peer lending, is a kind of private micro lending mode that gathers small amount of private funds to lend to the people in need of funds. At that time, mutual gold platform often promised high interest rates to borrowers. Attracted by interest rates, a large number of funds poured into online lending platforms. According to the monthly report released by online lending house in December 2016, the cumulative trading volume of P2P online lending industry has reached 3429 billion yuan, and the loan balance has increased to 816.224 billion yuan, which makes the online loan industry unprecedented prosperous.
The prosperity has given these mutual gold companies the confidence to land in the secondary market and obtain more ammunition. Since 2017, many mutual gold companies have successively landed in the capital market. This trend continued to 2018. The listing of mutual gold has pushed the industry to the peak, but the hidden worries have long been buried.
Falling into the clouds
The development of the industry will never only have a bright side, mutual gold industry has no two on the surface, in fact, the undercurrent surging behind.
In October 2017, qudian officially landed in the U.S. capital market. Luo min lamented that “we have caught up with a good era of poor families and noble sons”. Investors also congratulated their unique vision and caught a good project. At the same time, qudian quietly ushered in the biggest public opinion crisis since its establishment.
Luo min and investors
While Luo min and investors are immersed in the flowers and applause of Wall Street, the high-profile and successful store has aroused the domestic public opinion about the hidden danger of its excessive dependence on ant financial services for its flow and risk control, and the immoral discussion of bringing the campus loan mode and student promotion mode into the campus.
In the torrent of public opinion, on the sixth day after the listing, an article named “Luo min’s response to everything” pushed the incident to a high point. Luo min hoped to respond to the outside world’s queries in the form of interviews, but these responses brought interesting store into a more embarrassing situation.
The reason why it encountered such a challenge was due to the dilemma faced by mutual gold company in the business model and regulatory level at that time.
First of all, in terms of business model, qudian, which has been pushed to the forefront, makes the market pay attention to the business data of individual companies and the performance of the whole industry. People begin to question whether the listing of mutual gold enterprises is based on the “original sin” of people’s consumption desire. Once the huge amount of private lending business breaks down, will it cause structural risks in the financial sector You want to know? For a while, all mutual gold companies were taken out in this round of dispute and examined carefully.
Mutual gold company’s business difficulties were immediately taken to the table, the first is the campus loan business. Since 2016, all kinds of negative news about campus loans have begun to burst out. Violent collection, usury, naked loans, students’ jumping off buildings and other incidents have constantly impacted people’s bottom line. On September 6, 2017, the Ministry of Education issued a document, “ban the campus loan business, any network loan institutions are not allowed to grant loans to college students.” Before Luo min responded, Lexin, qudian and other enterprises had already withdrawn from campus loans, but their past experience has made them bear “original sin”.
As mentioned above, under the premise of unclear regulatory policies, it is too difficult to discuss cooperation with financial institutions. Most mutual gold enterprises have turned to P2P mode. However, with the rapid development of the whole industry, P2P has been in a storm.
In December 2015, more than 40 people were taken away from the Shenzhen Bao’an branch of e-rental treasure. On January 11, 2016, the official information of the economic crime investigation bureau of Shenzhen Public Security Bureau said that Shenzhen public security organs had put on file a case of e-rent-treasure online financial platform and its affiliated companies suspected of illegally absorbing public deposits.
Since 2018, the news media will almost daily expose the news that the online lending platform has closed down due to default, or even run away, and countless investors have suffered losses. According to the data of some research institutions, in 2018, the default scale of P2P in Shanghai alone has exceeded 200 billion yuan, and the number of investors involved is huge, which also affects the stability of the social and financial system to a certain extent.
In this context, the strong supervision of the network loan industry began.
In December 2017, the notice on doing a good job in the rectification and acceptance work of P2P network lending risk requires all localities to complete the filing and registration of major P2P institutions within their jurisdiction before the end of April 2018.
In April 2018, the notice on strengthening the rectification and acceptance of asset management business through the Internet was issued. The core of the notice is to publicly issue and sell asset management products relying on the Internet, and obtain the asset management business license or the asset management product consignment license issued by the central financial management department.
There is a need for filing before, and there are legal conditions for filing, so the non-conforming online lending platform can only exit.
On January 21, 2019, “opinions on classified disposal and risk prevention of online lending institutions” pointed out that the main direction of work was to adhere to the withdrawal of institutions, and actively guide some normal operating institutions to transform into small network loan companies, loan aid institutions or guide licensed asset management institutions. Subsequently, more than ten provinces and cities such as Shandong, Sichuan and Shanxi announced the total ban on P2P business, and P2P business officially ushered in the end.

The first batch of listed companies had to start to transform. On the one hand, they cooperated with traditional financial institutions, on the other hand, they applied for licenses. If it was difficult or failed to transform, they could only withdraw from the industry, and the stock price plummeted.
In September this year, Li Zhiguo, chairman of the board of DIGFA, recalled the experience of mutual gold enterprises in the past few years from the perspective of an experienced person. “From the start-up to the present, I have encountered this dilemma for the first time: running, the entrepreneurial track is closed, and the whole industry involved is denied and cleared.”
There is only one way to survive – quit P2P. Li Zhiguo recalled: “P2P business has been completely stopped, and the liquidation work is being carried out intensively. We don’t have much time left. Executives have cut salaries by 30% to 40%. Several floors of office buildings have been withdrawn, and only 300 people have been left after the original 1400 people have dug for money. ” By June this year, digi had paid the principal and interest of the lender ahead of time. Li Zhiguo said: digging money has finally ended.
Li Zhiguo
From Li Zhiguo’s self-report, we can see that the whole mutual gold industry has faced great pressure and survival difficulties in the past few years, but in the industry, only a few enterprises like digging money can successfully land.
Looking back, the companies that led the first wave of mutual gold listing have the following in common:
Business homogenization is serious, the main business is loans.
Some mutual gold companies rely on large companies, such as Lok Sin, which has been relying on Jingdong to provide high 3C products. Interest staging has been occupying the flow entrance of Alipay. Once a large company hatches its own business model and increases investment, mutual gold companies can only be abandoned.
In addition, in the early stage of business, in order to control the overdue rate, mutual gold company did not hesitate to use violent means to collect, and social malignant events occurred frequently. In the field of public opinion, mutual gold company bears the original sin, which has laid the root for the strict supervision faced by the industry.
Due to the superposition of multiple factors, the anti risk ability of mutual gold enterprises is seriously insufficient. The highlight of the industry will end immediately after a flash. Today, the once famous qudian stock price has fallen to the bottom, and is seeking a new life through luxury e-commerce. With such a story before, will the new wave of mutual gold companies repeat the curve of opening high and going low?
New clothes of Finance
The reason why qudian, Lexin and other companies were able to get the support of ant group and Jingdong in the early stage of development was related to the strategic focus of big companies at that time, which also became the source of the background of the new round of mutual gold listing.
In 2014, the Spring Festival of the horse year, WeChat launched the “red envelope” product based on acquaintances’ social relations chain, and completed the large-scale user card binding at one stroke. This classic case of loading the Internet history is called “sneak attack on Pearl Harbor” by Ma Yun. It is also said that WeChat payment completed Alipay’s eight years’ work overnight.
Although Alipay has made a lot of efforts to suppress it since then, WeChat has made remarkable progress in the mobile payment market by virtue of its significant social advantages. According to the data of China’s Analysys, in 2015, Alipay’s share of the third party mobile payment market was 68.4%, while WeChat’s payment was only 20.6%. But in the second quarter of 2016, Alipay’s market share dropped to 55.4%, and second WeChat payments increased to 32.1%.
In the Spring Festival of 2016, Alipay became the exclusive interactive partner of Spring Festival Gala.
So far, the mobile payment battlefield has entered the era of “two heroes”.
The core advantage of WeChat’s ability to break the bank lies in WeChat’s social attributes. Its social products are highly sticky and strong interactive. Alipay, the main payment function, belongs to the APP, a tool with low frequency. In order to resist aggression, Alipay launched an attack on its opponent’s advantage area, trying to improve product stickiness through social interaction.
In 2015, Alipay launched the “life circle”. The next year, it referred to the “life circle” from the two level entrance to the “dynamic life” of the home page, but only a few achievements were achieved.
The Alipay Ji Fu activities during the Spring Festival of 2016 brought users a wave of friends, but the heat did not last.
At the end of 2016, Alipay launched its social function circle, which soon caused great controversy due to large scale pictures and unspecified operation rules.
After the outbreak of the “circle” incident, Alipay chose to give up social networking and return to the traditional advantage of financial business.
It is precisely because of concentrated efforts to fight with WeChat, fight social interaction and strategic transformation, Alipay has opened up the space for start-ups in the non strategic business at that time, providing an accelerator for the fast growth of interest shops. A similar scenario also appears in Lexin: in 2014, Lexin received $33 million of investment from JD, and carried out in-depth cooperation with JD in supply chain, logistics and other fields.
The “war” between giants involves too much energy. They have to temporarily support mutual fund company in the first round of listing tide and help it carry out the “agent war” in the field of micro loan business. Through investment, ant group and Jingdong are still deeply involved in the micro loan business and can obtain stable income after investment. On the other hand, the two giants have obtained new payment flow in the field of loan, which is helpful for their performance in the payment battlefield.
However, the time window of the giant to the start-up company is not endless. Even when the confrontation with WeChat is facing the most intense, the giant’s tentacles are also spreading quietly. When the war of payment begins, Alipay and the ant group behind it have also been on the line of Hua Hua, C, and B oriented Internet banking. With its own credit system and many products such as financial management and insurance, its financial attribute has been strengthened.
This is ready for subsequent changes: on August 25, 2018, ant financial services publicly stated that it had reached a consensus with qudian and would not renew the relevant commercial agreement, saying that this was a normal business arrangement. Affected by this, the share price of interest shop fell sharply. According to the prospectus submitted by ant group on August 25 this year, the proportion of digital financial revenue, including micro loan technology, financial management technology and insurance technology, is increasing year by year.
The challenges and difficulties faced by the first batch of mutual gold companies are in the front, and the new batch of mutual gold companies seeking to be listed behind the giants all have a common choice – no matter ant group, Jingdong several branches or lufax, they are continuously expanding their business scope, weakening finance and emphasizing science and technology.

In June 22nd this year, the ant gold clothing was renamed the “ant Technology Group”. At the operational level, Alipay has been playing down the financial labels this year, and “life” has been pushed to the front desk.
Jingdong finance was officially upgraded to Jingdong digital technology in 2018, and began to expand its application and upgrade iteratively in more real industries. According to the data disclosed in the prospectus, its business consists of digital solutions for financial institutions (to f), digital solutions for merchants and enterprises (to b), and digital solutions for government and other customers (to g) Three business sectors.
Finance is no longer the focus of mutual gold companies. Technology has become a new love.
From the information disclosed in the prospectus, at present, ant group, Jingdong Shuke and lufax are still in the process of transformation. However, since ant group submitted its prospectus, there has always been a debate over its valuation logic: whether it is based on financial attributes or technological attributes, the outcome of the debate will determine the actual price of ant group.
As powerful as ants, they still can’t get out of the question of finance or technology, which is also the metaphor of the second wave of mutual gold listing: thanks to the endorsement of giants, stronger risk control ability and more complete license resources, the new wave of mutual gold companies listed on the market have stronger risk resistance ability and broader development prospects. In other words, ants will not encounter the questions of interesting stores But financial technology is still on the way, and this is the real key to unlock the future development of these companies, and it also determines the real password how high financial technology companies can climb in the future.
(statement: This article only represents the author’s point of view, not Sina’s position.)