Qifang P2P Banking
Project Brief：
Qifang is a domeatic Internet start up working on online small personal loan business. It provides a “peer2peer” (P2P) loan service. That is to allow the lenders lend money to more than one borrowers through the website, lenders charge interest to get rewards, and the borrower can raise the fund from a number of lenders. Qifang has become one of 34 companies who won “2009 World Technology Pioneer” awards on the World Economic Forum, and was the only Chinese company to win this award since 1999.
The Challenge:
Peer to peer loan was considered a pioneering innovation in Europe, but it also suffers from high breaching of contract rates and the uncertainty of management authority thus developing very slow. So does in China. Besides, online lending is a gray area in China and it is a new thing. Perhaps one day it will be accepted by the public like online shopping and online payment, but there also many uncertainties. It may accidentally touch the “land mines” then forced to shut down, so the risk is high. Not only is the national policy, but also because lack of credit, this model still requires a very long period of guildance.
And the volume of visitors to Qifang is small and the online activity has been very slow. Profit model has been difficult to set up.
The Solution:
Although Qifang chose to focus on the student loan market when they conduct the business in China domestic market. The needs is cleaer and rish is lower. And Qifang will transfer the money directly to the educational institution, which at some point, solved the problems which the original model in overseas markets had encountered. However, the degree of users’ activeness is still not enough, and there has been no revenue, but simply to rely on angel investment capital.
Peopeo team analyzed the domestic situation, re-define the business model for Qifang, also developed a profit model and provided the corresponding design and strategy. Peopeo even had been taken over the operations for almost a year, the CEO of Peopeo, Mr. Tingbin Tang also served as the CEO of Qifang for a period of time. Peopeo analysized that, since China has not been established the social security number, and personal credit system is not well developed, lending through the network is difficult to form a trust. However, the Chinese people has no shortage of compassion, and China’s average weekly charitable donations are close to 0.4 billion yuan, especially in the field of education. So Peopeo helped Qifang to make some strategic adjustments, and introduced the charity donation function. During the operation process, a lot of money had been donated to many primary schools through Qifang. Peopeo had also planned a variety of business model, in addition to Lend to Help borrowing function, Donate to Help donation function, Peopeo also proposed Shop to Help Charity shopping, Game to Help and Ads to Help models. But then because Qifang board sold it out, the other profit model did not get a chance to proceed.
