Since peer-to-peer lending and financing (P2P) made its appearance in China a decade ago, the country has become one of the world's leading markets for the service, with pent-up demand causing the domestic market to grow especially rapidly over the last two years. This has resulted in many of the premium platforms finding themselves no longer satisfied with limiting themselves to their home market and beginning to explore what is available elsewhere. Leadercf.com, one of China's earliest P2P platforms, has recently begun the exploration, providing professional information on financial management in China to members of the world's overseas Chinese community.
In the P2P sector, the platforms that can provide the highest quality assets can be expected to become the leaders. With the rapid expansion of the sector, quality assets are becoming increasingly harder to find, and it has become a challenge which P2P platforms are having to face. In addition, as economic development becomes generally more globalized, there is a growing awareness of wealth investment among individuals with high net worth value, and their demands in terms of what they expect from wealth management are continuously increasing. As a consequence, the market space for global asset allocation is expanding, with the strategy of distributing the assets across several global markets becoming a key approach among many wealth management firms. It is within this context that China's P2P sector is beginning to enter overseas markets.
Leadercf.com has gradually expanded into supply chain finance, helping thousands of SMEs successfully meet their financing needs. With attractive spreads between Chinese and foreign markets, providing comprehensive and professional information on financial management in China can make it appealing to members of the Chinese overseas community to invest in the country's domestic market, which, in turn, would help China-based SMEs raise capital while preserving and increasing the value of the investors' wealth.
Some competitive P2P platforms in China with obvious advantages would naturally look abroad once their business in the domestic market has reached a certain level of maturity, as international expansion helps them broaden their business reach, increase profit margins and enhance brand awareness, Zhang Wensheng, chief operating officer of leadercf.com, explained. At the same time, China's SMEs are growing so fast, that their increasing demand for funding has grown beyond the capabilities of the domestic capital market to meet it. Difficulty in financing is a real problem facing SMEs. Drawing foreign capital into the Chinese market would improve the opportunities for growth across the industries in which SMEs have a presence and go a long way in supporting their development.
In order to stand out from the competition, P2P companies are undertaking efforts to gain strong capital support and to introduce their own innovative products and services. The P2P platforms which are planning to expand into overseas markets have already established a solid foundation in China and have the infrastructure in place for such an expansion. Leadercf.com, for example, is already well established and has reached a certain level of maturity in the domestic market, including having put in place a comprehensive, standardized and duplicable risk management model, a business practice that is most critical to the online financial sector.
Since its inception in August 2013, leadercf.com has grown its business by leveraging its superior resources and advanced technologies across the entire development process, and has become one of the country's top 100 online loan platforms. The platform continually enhanced its risk management model and built a portfolio of quality assets. The firm hand-selected its partners for each sector, with stainless steel, jade and food being the main areas on which the firm has focused, while training and building out its risk management team. A large element of the firm's success lay in the ability to constantly and simultaneously optimize risk management, business development and financial sides of its operations.
To date, P2P companies focused chiefly on driving innovation in the marketplace and experimenting with different business models for online financial products. However, with the development of financial technologies (or fintech) worldwide alongside emerging technologies including cloud computing, big data and artificial intelligence, all of which are changing the way people manage their day-to-day lives, P2P companies have started exploring new business models, products and services that have come to the fore as a result of the rise and transformation of the fintech sector.
Both technical and financial innovation are at the core of leadercf.com's overall strategy. With the recent transformation taking place in fintech, the firm leveraged big data and its own strong R&D abilities to aggressively move into the mobile smart terminal segment of the sector, delivering the financial information that investment professionals consider most valuable, as well as providing a secure communications bridge through which they could efficiently complete their P2P transactions.
China's leading P2P companies, among which leadercf.com is a key player, have demonstrated their strength and brand power, and are in the process of initiating their expansion into overseas markets. Many are still in the exploration stage, deciding whether to focus on building a platform that provides Chinese firms with access to foreign capital, or become a supplier of higher quality financial information services, yet, regardless of what direction each of the firms decide to take, the market is one well worth paying close attention to.