A report charts the expansion of crowdfunding platforms in China as a source of capital. It also examines internet wealth management products, mainly money funds, where yields have been under pressure.

China’s crowdfunding sector mushroomed to 235 platforms last year, raising RMB5.585 billion (around $889.6 million), up 98 per cent from 2014, highlighting rapid growth in the alternative financial sector as the Asian giant seeks to reform its financial sector, a new report says. Separately, the study tracks rapid growth in parts of the country’s wealth management products market.

The report, by Research in China, entitled China Internet Crowdfunding and Wealth Management Industry Report, 2015, said the first crowdfunding platform appeared in China in July 2011. Platforms have since expanded rapidly, adding 142 in 2014.

Within types of crowdfunding, equity-based platforms have been favoured as a capital-raising route. During 2014-2015, internet companies, brokerages, equity transaction centres, and equity investment funds sped up their layout in equity-based crowdfunding. In the first half of 2015, the number of successful financing projects on equity-based platforms in China reached 658, raising RMB3.746 billion (67.1 per cent of all funds raised in the crowdfunding industry), up 59.4 per cent compared with RMB2.35 billion throughout 2014. 

In the first half of 2015, the top five equity-based crowdfunding platforms by amount of financing were angelcrunch.com, dj.jd.com, renrenchou.com, vc.cn, and evervc.com.

The report also examines internet-driven wealth management products, mainly money funds, in China. By asset size, Yu'ebao, managed by Ant Financial under Alibaba, is far bigger than other competing products. By the end of June 2015, Yu'ebao users hit 149 million, and asset size amounted to RMB613.381 billion, seizing 25.4 per cent of the money fund market share and 41.9 per cent of the internet wealth management product market share.

With introduction of easy monetary policies by China's central bank in the second half of 2014, the yields of internet wealth management products have fallen sharply. Internet wealth management platforms introduced other wealth management products to deliver yields, such as bond funds, blend funds, equity funds, bills, insurance, loans and equities.

The main internet wealth management platforms in China include Ant Financial's Zhao Cai Bao, JD Finance's financial channel, Tencent' Li Cai Hui, and Baidu Finance. Zhao Cai Bao gets the lion's share of the internet wealth management market based on 300 million real-name Yu'ebao users. By the end of July 2015, the number of investors on Zhao Cai Bao exceeded 7 million, and cumulative transactions reached RMB224.497 billion, up 29.0 per cent month-on-month. Transactions in July 2015 hit RMB50.53 billion, rising 26.9 per cent month-on-month.

“With rising income, growing awareness of wealth management and introduction of multiple wealth management products meetings needs of different groups of people, the number of internet wealth management users and market size will expand rapidly,” the report said.