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CCID Consulting Analyzes the Characteristics of China's Internet Finance Information Service Industry

Posted on: Tuesday, 16 December 2008, 07:00 CST

BEIJING, Dec. 16 /PRNewswire-Asia/ -- CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released an article on China's Internet finance information service industry.

Amid ups and downs in the Chinese stock markets, the internet finance information service industry has developed rapidly in recent years as a supporting industry for the finance market, seeing a series of opportunities and challenges. Internet finance information service industry in China has its outstanding features, as well as problems. It is necessary to find out a way for the development of China's Internet finance service industry.

Features: China's Internet finance information service industry is still in an initial stage

The internet finance information service industry appeared in China in the 1990s and achieved its peak in 2007 with a growth of 270. With its huge domestic and overseas market potential, China's internet finance information service industry scale is only 1.25 billion yuan, a share of less than 1% in the global finance information service industry. China's internet finance information service industry has great space for growth.

China's Internet finance information service industry is dominated by a few big players. There are only 22 service providers that are authorized by the stock exchanges to provide level 2 and topview services. CCID predicts that rapid growth and high profit level of Internet finance information service industry will attract more companies, including prominent international companies.

Features: The long tail appears among institutional customers and individual customers

The major income of the internet finance information service industry comes from securities and other institutional customers, as well as individual customers, among which about 70% comes from individual information services. This situation lies in the fact that individual investors form the main body of China's securities market. More than 85% of the trading volume comes from individual investors. 100 million stock investors, 250 million internet subscribers, and 600 mobile phone subscribers are potential individual customers for the internet finance information service industry. If each of them spend five Yuan on finance information service each month, the market scale will reach 6.6 billion Yuan. China has about 1,200 finance institutions, including securities, banks, funds, insurance agents, QFII, trust, and VC. If each of these organizations spends 1 million Yuan each year, the market scale will reach 1.2 billion Yuan.

Problems: Trade off between growth and stability

The features of internet finance information service industry lead to the inevitable conflicts between growth and stability. Services for individual customers involve more risks, while stable services for institutional customers are restricted due to limited development space. Hence, it is necessary for internet finance information service providers to improve their competence in main business with diversified services and reasonable business structure so as to balance company growth and stability. Whether a company would succeed in solving these problems would decide its development prospect.

Problem: Inflexible product strategies

Mainstream Internet finance information service products are homogeneous with little personalized and customized innovation. For example, most finance websites still stay in Web 1.0 style with only mass information and few customized functions and interaction with users. So do data information services and quotation transaction system. Interface and functions of Topview products are also similar products due to the guidance of the Shanghai Stock Exchange. Besides, some companies design their products by imitating and copying, which reduces the drive for innovation in regular enterprises.

Homogeneous products and price control set by the Shanghai Stock Exchange led to close price in the market, which results in uncertainty when users make their choice. On the other hand, functions and contents of most high value product are not detachable and paid by month or year. High price lifts purchase threshold.

CCID Consulting recommends the following several key areas for development to internet finance information service companies

Optimize business structure basing on self-advantages. It is necessary for Internet finance information service companies to consolidate institutional business to ensure a stable income. On the other hand, companies should strengthen individual business, especially innovative services so as to achieve rapid growth. Development thoughts of Internet finance information service companies should break the industrial and regional limitation to expand service scope and product contents.

Develop diversified sales channels based on the internet. For example, benefiting from cooperation with SINA, NetEase, and other portal websites, Compass expands its own business and brings more profits to its partners. Online communities, IM, and other virtual channels are effective sales channels as users cannot get enough information just from the official websites of internet finance information service companies due to laggard service mode and absence of e-commerce functions. Besides, Internet finance information service companies should strengthen cooperation with securities and other institutional customers, which have good connections with the main target user groups.

Adopt feasible prices and promotion strategies. Most individual customers of finance information services tend to choose micro consumption. However, current price strategy lifts the threshold of most users. Internet finance information service companies should improve their pricing strategy and provide various payment methods. For example, Internet finance information service companies can provide a fixed ID to individual users, by which users can deal with deposits through telephone, online banks, third party payment platform, and other channels so as to pay by recycling times.

Market promotion will be a key issue due to homogeneous product and high price. Free, low price, and discount are main product promotion methods. Besides, experiencing marketing will be an effective method by which users can understand products better and reduce risks.

About CCID Consulting

CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly affiliated with China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with over 300 professional consultants after many years of development. The company's business scope has covered over 200 large and medium-sized cities in China.

Based on major areas of competitiveness: industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrading, development strategy and planning, marketing strategy and research, HR management, IT programming and management. CCID Consulting's customers range from industrial users in electronics, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming the No. 1 advisor for enterprise management, the No. 1 consultancy for government decisions and the No. 1 brand for informatization consulting.

For more information, please contact: Cynthia Liu Coordinating Manager CCID Consulting Co., Ltd. Tel: +86-10-8855-9080 Email: liuyan@ccidconsulting.com

SOURCE CCID Consulting Co., Ltd.

Source: PR Newswire

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