Financials Author: Qing Lan Editor: Luke Sheehan Jan 06, 2021 10:05 AM (GMT+8)

Ping An's Lufax, Alibaba's Ant Group and JD's JD Digits are considered to be the three largest fintech companies. Competition is always fierce among top players.

Jen Theodore

This article is Chapter 3 of EqualOcean's comprehensive analysis of Lufax Holding. Explore all the chapters of the report:

Chapter 1: Industry evolution

Chapter 2: COVID-19: Unexpected stimulus

Chapter 3: The race between China's fintech trio: Lufax, Ant GroupJD Digits

Chapter 4: Huge growth potential in markets

Chapter 5: Operation strategy: Capital-light model and unique client segment

Chapter 6: Lufax and Ping An

Chapter 7: Diverse client acquisition channels

Chapter 8: Risks


Chapter 3: Chases among China's fintech trio: Lufax, Ant Group, JD Digits

● Lufax ranks second in the retail credit market but leads in ticket size.

● Lufax differentiates itself with the strategy focusing on long-term and diverse investment products.

Ping An's Lufax, Alibaba's Ant Group and JD's JD Digits are considered to be the three largest fintech companies in China based on valuation.

Who won the credit services?

All of the three focus on the credit business. Ant Group offers credit services to individuals through Ant CreditPay (Chinese: 花呗) and Ant Cash Now (Chinese: 借呗) and to merchants through MYbank. JD Digits's main credit products include JD Baitiao (Chinese: 京东白条) and JD Jintiao (Chinese: 京东金条), which targets retail clients. Lufax provides secured and unsecured loans to small businesses and some salaried population.

From the business scale, Lufax is a challenger. Lufax ranks second in the retail credit market, but only takes up a 12% market share among non-traditional retail credit providers, based on the outstanding loan balance. 

Consultancy Oliver Wyman, for instance, in its report, didn‘t disclose the exact name of these market participants. The top player is considered as Ant Group as its consumer credit outstanding loan reached CNY 1.73 trillion during the last twelve months by end of June 2020, significantly surpassing the figure of Lufax of 519.4 billion in total.

But the strategies are different as mentioned before- Lufax targets the affluent population with larger loan sizes. The average ticket size is several times larger than that of its competitors, especially when compared to Ant's main product, Ant Credit Pay, which only has an average size of CNY 2,000. 

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In the small business loan market, which is the main battlefield, Lufax has a similar scale to the top player and takes up over 30% of shares. Differentiating itself from others, Lufax provides both secured and unsecured loans. 

Also, longer lending periods and more expensive fees are the other strategies. Lufax's loan duration is around 35 months, while Ant's is less than a year, and the small business loan's maturity is lower than three months, and JD Digits also has relatively shorter durations. Accordingly, the fees charged by Lufax are also higher along with the longer maturity.

Lufax's unique strategy in wealth management 

Wealth management business is not considered a strength of Lufax. By the end of June 30 of 2020, it has the scale of CNY 375 billion in the sector, significantly lower than Ant of CNY 4 trillion. The difference is that Lufax focuses more on investment products with longer periods, while Ant prefers shorter ones, represented by money market funds (MMF). Excluding MMF products, Lufax takes 4% more shares in the market. JD Digits didn't release the specific client assets, but from its strategy, wealth management isn't the main deployment. 

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However, Lufax seems to be seeking product diversity. By the end of the first half of 2020, Lufax had partnered with 429 FIs, including 123 mutual funds, 103 private investment funds, 100 asset management companies, 40 banks, and 25 trust companies, with over 8,600 products provided. Ant Group, on the other hand, only facilitated over 6,000 investment products for 170 FIs. Just like its credit sector, Lufax targets the affluent class who have more diverse and high-standard investment demands.

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Next chapter we will discuss our expectation on the two markets’ future developments.