Corporate Profile

Corporate Profile

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Overview

We are a leading online consumption and consumer finance platform for educated young professionals in China. We provide a range of services including financial technology services, membership benefits, and a point redemption system through our Fenqile ecommerce platform and Le Card membership platform. We work with financial institutions and both online and offline brands and retailers to provide a comprehensive consumption ecosystem catering to the needs of young professionals in China. We utilize advanced technologies such as big data, cloud computing and artificial intelligence throughout our services and operations to better serve our customers. The use of these technologies encompasses our risk management and loan facilitation systems, which allow for the near-instantaneous matching of users' funding requests with offers from over 100 potential funding partners.

Our Users

We strategically focus on serving the needs of educated young professionals in China between the ages of 18 and 36. These are the customers, we believe, with high income potential, more advanced educational background, higher consumption needs, a temporary mismatch between their needs and their income levels, a strong desire to build their credit profile, and an appreciation for an efficient user experience. In addition, we believe that the educated young professionals in China will mature to become the primary group of consumers of what we term as the “New Consumption,” referring to new consumption ways embraced by the new generation, including credit consumption, membership-based consumption and others.  Our online ecommerce, consumption and consumer finance platform, Fenqile, addresses our users’ needs by offering an array of products and services as well as credit lines. We offer a wide variety of competitively priced products on our e-commerce channel and allow users to directly use their credit lines to finance purchases. Through our Le Hua Card, we also enable our customers to connect their preferred payment tool directly to their credit line with us, allowing them to draw down directly from their credit line when they make each individual purchase. The individual loans that we provide to our customers are matched with diversified funding sources, which are primarily institutional funding partners in our lending programs. Our institutional funding partners include major Chinese banks, consumer finance companies, and other financial institutions and organizations.

From our inception in August 2013 through the end of 2019, we originated loans to over 13.3 million users on a cumulative basis. In 2017, 2018 and 2019, we originated loans to approximately 4.1 million, 4.9 million and 9.9 million active users through our platform, representing a compound annual growth rate, or CAGR, of 55.4%. Our online consumer finance platform features a high proportion of repeat users. Of all active users on our platform in 2017, 2018 and 2019, approximately 80%, 80% and 81%, respectively, were repeat users who had made at least one transaction on our platform before in the same year or in the previous year. As of December 31, 2019, we had over 19.4 million users with an approved credit line and over 73.3 million registered users.

Our Loan Products

We launched Fenqile, our online consumer finance and e-commerce channel, in October 2013. On Fenqile, we offer credit lines to qualifying customers that can then be applied to a variety of uses, we generally categorize as either personal installment loans or installment purchase loans. Our credit products provide our customers with a competitive interest rates and flexible repayment solutions. All of our loan products are unsecured and feature fixed monthly payments with various terms. In 2018 and 2019, we originated RMB66.1 billion and RMB126 billion in loans, representing an increase of 90.6%. As of December 31, 2017, 2018 and 2019, the average user loan balance was RMB6,580, RMB9,048 and RMB7,829, respectively. We offer a basic credit line to our qualified users, or the Le Hua credit line.

Our E-Commerce Channel

The e-commerce channel on Fenqile offers competitively priced products across 28 categories including electronics, fashion accessories, home furnishings and decor, used goods and outdoor apparel. The product offerings on our e-commerce channel are designed to specifically meet the shopping needs of educated young professionals. Our e-commerce channel features both direct sales of merchandise curated by us, as well as a marketplace through which third-party online merchants offer and sell their own products and services, such as leisure, travel and continuing education. On our online marketplace, user orders are placed and fulfilled directly by the third-party merchants. The GMV of our e-commerce channel amounted to RMB4.1 billion in 2017, RMB5.8 billion in 2018, and RMB8.1 billion in 2019. In 2019, we offered over 3.0 million stock keeping units to our users.

Our Membership Benefits and Partnership Programs

In 2019, we launched our Le Card membership and benefits program, which is offered on a separate mobile app. The Le Card app offers a wide range of savings, benefits and membership privileges across various retailers, products, channels, and brands, including but not limited to food and beverage, apparel, hospitality, and leisure - all of which are targeted towards serving our educated young professional customers. Le Card allows our customers access to a wide variety of savings across different products, and also aggregates the loyalty programs across different brands and platforms to create a form of universal type point system which can then allow users to aggregate their points across loyalty programs between different retailers and brands. This in turn allows incremental benefits to the user and our retail partners, many of whom can be wary of working with larger ecommerce or retail players. As of December 31, 2019, we have 1.8 million Le Card users. In addition to the original Le Card program, we have a paid membership program, Lehei/Black Card (now upgraded as 99 Membership), offering premium services and additional discounts. As of December 31, 2019, we have 1.5 million cumulative Lehei/Black Card customers.

Our Funding Partners and Funding Sources

We benefit from our position of having diversified funding sources, including over 100 funding partners as well as individual investors. We primarily finance the loans to users through the proceeds provided by third-party commercial banks, consumer finance companies, other licensed financial institutions and partnering peer‑to‑peer lending platforms, as well as through the establishment of consolidated trusts and issuance of asset-backed securitized debts. We refer to these funding sources collectively as our institutional funding partners.

In our direct lending programs, we refer qualified users to institutional funding partners which provide the funds to finance the loans, based on their risk-and-return requirements. Our proprietary Wormhole system, operated by Qianhai Dingsheng, one of our variable interest entities, connects our users and funding partners’ systems in an automated process that minimizes manual review and approval by the funding partners, and allocates funding needs to various funding sources with different risk-and-return parameters.