The amount of financing increased by four times year-on-year in 2017

Three months after the “public turmoil” was silenced, Fun Shop planned to use “auto finance” to conduct a “magnificent turn”. On January 16th, Luo Min, founder and CEO of Fun Stores Group (NYSE:QD, “Fun Shop”) disclosed the layout of its new retail business for the first time, and the low-profile two-month “big white car” was officially unveiled. Luo Min, who had fallen into the whirlpool of public opinion before, faced the media for the first time to admit his mistake.

Founded in 2014, Fundian Group is a financial technology company that focuses on cash loans. At the same time, it is also the only survivor of founder and CEO Robin in nine startups. The predecessor of the Fun Shop was the “interesting period” of staging shopping platforms for college students. At the beginning of the establishment, they began to use the campus to start a loan. Under the supervision of the policy, they gradually withdrew from the campus staging market, and their target customers turned into a young, blue-collar middle-income class.

On October 18th, 2017, Fun Shop announced its listing on the NYSE. Its IPO price was set at US$24 per share, which was higher than the issue price range of US$19 to US$22 per share, setting a myth of market value of US$10 billion. Last year, Chinese companies were the largest IPOs in the United States, and the United States was the fourth largest IPO last year. However, it was followed by a series of questions about its profitability, business model, and business ethics.

However, with the tightening of policies, many platforms have tightened lending, began to cut interest rates, strengthen risk control, and began to look for new consumer finance scenarios in order to seek transformation.

In this context, the transformation of Fun Shop is just as urgent. Luo Min said that after April 11, 2017, all the products in Fun Shop were adjusted to an annualized interest rate of 36% or less, and Fun Shop was transformed into a consumer financial helper company. Auto finance became the new stage of the track in the future of Luo Min. Luo Min believes that the Dabai Auto is "not late, late, and it's time to enter the venue."

Fun Shop is another company that entered the auto finance business in the last year. In 2017, second-hand car electricity suppliers can say that they concentrated their efforts. Guazi launched a new soybean car, Murray Financial launched a Meritor car, Youxin launched Fuyicheng, and Yixin Capital launched a new business such as Kaiba. The logic of these brands is simple. In brief, auto finance can be specifically divided into new car finance and used car finance. At present, the net profit rate of licensed auto finance companies exceeds 38%, and the non-performing loan ratio is around 0.5%.

In the new car finance, consumer finance is prevalent, but the future prospects for auto finance are expected to expire. At present, the penetration rate of used car finance is relatively low, and the layout of new car finance can accumulate experience and technology for it. In essence, this is a company that focuses on its core business. expansion. No matter from which side, this will not be a loss-making trade. The joining of the Fun Shop is an Internet financial company's splitting of a car finance company with huge potential.

At present, there are four major strengths of auto finance, among which commercial banks and mainframe factory finance companies are the main players in the auto finance industry. They occupy more than 90% of the market share by virtue of the capital cost advantage. The third is the financial business of auto internet finance platform and second-hand car e-commerce, including Yixin Finance, Murray Finance, Youxin Used Car Finance and Youxin New Car, etc. The fourth is auto finance leasing companies, such as Can Valley, Zhongan Financial Control etc.

In addition to second-hand car electricity suppliers, auto finance companies, which are regular forces in the automotive industry, also carried out business expansion last year, setting off a boom in capital increase. According to the zero-tenancy lease statistics, a total of seven auto finance companies disclosed the capital increase plan in 2017. Among them, BMW Auto Finance, Fiat Chrysler Auto Finance, Tianjin Great Wall Binyin Auto Finance and Dongzheng Auto Finance have been formally approved by the banking regulatory bureau, and the total amount of capital increase is as high as 14.55 billion yuan. At the beginning of January this year, sources said that the financial registered capital of Changan Auto Finance was approved at the end of last year to increase from 2.5 billion yuan to 4.768 billion yuan, becoming the eighth auto finance company in 2017 to publicly increase capital information.

The frequent increase of capital by auto finance companies is related to the continuous high growth of the Chinese auto market. Under the rapid development of the business, it also brings pressure on capital consumption. On the other hand, auto finance companies basically lack other capital supplement channels, mainly supplementing capital through shareholders' capital increase and profit retention. According to the requirements of the CBRC's transitional arrangements for capital management of commercial banks, auto finance companies, like commercial banks, must meet the core tier 1 capital adequacy ratio by the end of 2018, and the capital adequacy ratio must not be lower than the requirements of 7.5% and 10.5%. . This is also the reason why many companies increase their capital.

The media had a preliminary statistics at the beginning of this year. In 2017, the total financing of auto finance (pre-IPO) was as high as 23.072 billion yuan, which was nearly 4 times that of 2016's 4.803 billion yuan. The total amount of financing for auto e-commerce in 2017 reached 16.063 billion yuan, an increase of 12 times over 2016 of 1.196 billion yuan. These two figures show that auto finance did enter the "blowout period" of development in 2017.

Dabai Automobile has already landed since the listing of the Group last year. In terms of business model, Dabai Motor did not adopt the asset-light model, but instead entered the auto financial market with its heavy asset operating model of self-built stores and direct-agribusiness-style leases. Within two months, it has built more than 150 direct-operated stores nationwide. “The Fun Shop chose to open its own store to the next store. This is the right direction. Besides, he himself also had many salesmen before and offline. These resources can be used,” an industry source told the Economic Observer Online.

However, the industry believes that cash lending companies are now turning to auto finance, which is more passive than active. In the area of ​​new car financing leased by Dabai Motors, there are already a number of players who have first entered the game, including the Dazai’s own car and the Yixin Group’s flag. Although the current overall volume is small, The market competition is very fierce. In addition, there are also many resources such as a host plant and a certain understanding of the automotive industry chain. However, these are not available in the Fun Shop.

"(Automotive New Retail) is definitely an opportunity to become a billion-dollar company." In Luo Min's view, but in how to get through the auto manufacturers resources and solve the core problem of marketing, Luo Min admits that this is a big white car facing The challenge is: "The goods are all in, they can't be sold, they can't be dealt with." Luo Min said that this is the most important thing to worry about. They are also trying hard to learn. In addition, there is currently no auto consumer finance company license issued by the China Banking Regulatory Commission. According to Robin, the shop is applying for a license.

For a long time, due to the back of ant costumes, the performance of the shop has been rapidly expanded. Alipay's third-party services are the main channels for the customer to gain access to the shop, and the single form of guest acquisition has become the core of the shop. Development hidden dangers. In response to this, Luo Min announced that the answering channel “One Million Respondents” built by Fun Shop will soon enter the Dabai Auto App, and will invest RMB 100 million in the future for user awards. Traffic ecology. However, from the perspective of people in the industry, this “spend money” behavior does not bring a direct high-quality customer group.