Podcast Titan Himalaya Launches Its First Credit Product

Himalaya (Chinese: 喜马拉雅), one of China’s largest podcast and audio platforms, joined a slew of technology firms in launching on January 19 a consumer credit product on its app for Android.

The product, named “Xiao Tong Xi Hua Hua,” provides users with a variety of services ranging from order tracking to financial transaction assistance, among others.

Allinpay, a Chinese third-party payment service provider, said it will join hands with Himalaya and offer technical support in areas such as screening loan products for Himalaya users with credit needs.

Himalaya, which was founded in 2012, has long been eyeing a move into consumer finance. According to previous media reports, the Shanghai-based unicorn started to dabble in co-branded credit card business in 2017, collaborating with financial institutions such as China Construction Bank, Industrial and Commercial Bank of China, Everbright Bank and Huaxia Bank.

In mid-2018, the Chinese podcast leader teamed up with UnionPay, the third-largest third-party payment service provider after Alipay and WeChat Pay, in a co-promotional campaign. This allowed UnionPay users to obtain free Himalaya membership rights after they make purchases in excess of a certain threshold.

In the following years, Himalaya expanded its ties with not just banks but online financial platforms. It launched in 2020 a webpage that drew traffic to online credit products marketed by banking startups and fintech firms including Xinwang Bank, Wanda Puhui and 360 DigiTech. Thereafter, Himalaya even engaged in user acquisition for bank partners.

Currently, the mix of the company's financial services spans three key categories: credit, deposit wealth management and insurance. However, due to the lack of financial licenses, the company only acts as a broker that earns commissions by facilitating loans. The debut of “Xiao Tong Xi Hua Hua” in conjunction with Allinpay could mark a departure from this model.

According to public information, there were 30 licensed consumer finance companies within China as of September 2021. In recent years, several tech giants have acquired stakes in consumer finance companies. Xiaomi and Ant Group are two best-known examples.

But with the shift in China's regulatory landscape, the lack of financial licenses may no longer be the only thing that thwarts Himalaya’s ambitions to branch into consumer finance.

China's National Development and Reform Commission released a directive on January 19 in which it stressed the need to tighten supervision of the financial sector and strictly scrutinize platform companies’ acquisition of stakes in financial institutions and local financial organizations.

This has further darkened the prospect for Himalaya to operate the credit business on its own. Himalaya filed a prospectus with US Securities and Exchange Commission in April last year. But the firm halted its IPO application in July amid a widening regulatory probe following the Didi saga.

According to its prospectus, as of June 2021, the audio giant boasted 262 million monthly active users (MAU), including 111 million on mobile devices and another 151 million who tuned in via IoT and other open platforms.

Subscription and advertising constitute Himalaya's primary revenue streams, accounting for 80% of its operating revenue.

Of the CNY 2.51 billion (USD 395 million) generated in revenue in the first half of 2021, subscription fees amounted to CNY 1.37 billion, or 54.6% of the total, while advertising income stood at CNY 600 million, making up 24.5% of the overall revenue. Himalaya posted a loss of CNY 323 million for the same period.