"The trillion blue ocean market is worth looking forward to"
In April 2021, Lianyirong Technology officially landed on the Hong Kong Stock Exchange, as the first supply chain fintech SaaS enterprise to land on the capital market, which attracted widespread attention. Behind the market's high attention, there are not only the expectations of the trillion blue ocean market of supply chain finance, but also the new opportunities for industry breakthroughs brought about by the dual drive of science and technology and policy.
In the past few years, the multi-sector policy "combination fist" has helped small and micro enterprises to bail out, and constantly affirmed the status and role of supply chain finance in solving the financing problems of small and medium-sized enterprises. At the same time, modern technology represented by ABCD (AI artificial intelligence, Blockchain blockchain, Cloud-computing cloud computing and Big Data big data) is also bringing about the comprehensive improvement of text and image recognition capabilities, analysis capabilities, computing capabilities, business processing capabilities and security performance of the supply chain financial system, providing a strong source of development for the supply chain finance business.
Under the general trend of the industry, all parties have entered the supply chain finance business. Among them, Lianyirong, with a market share of up to 20%, based on the self-research of emerging technologies and the scenario-based landing of solutions, is constantly creating new supply chain financial technology solutions in an online, scenario-based and data-based manner, creating practical value for all parties in the supply chain financial ecosystem.
Looking back at the past 2021, Lianyirong has made great strides in both technology and business. As an industry leader, the development of Lianyirong is also the epitome of the supply chain finance industry, and a new era redefined and driven by science and technology and innovation has arrived.
"Policy + technology" boosts the trillion-dollar blue ocean market
In the past year, under the background of scientific and technological progress and policy support, supply chain finance continued to usher in a trillion-dollar blue ocean market.
As supply chain finance enters the ecosystem model, technology provides a core driving force for the industry to break the situation. The application of ABCD (artificial intelligence, blockchain, cloud computing and big data technology) technology has greatly improved the business efficiency of financial institutions and core enterprises, provided risk data reference, and become the main tool to solve various contradictions in the development of supply chain finance.
More notably, the survival of small and medium-sized enterprises has received more and more attention, and government agencies at all levels have focused on the financing difficulties and expensive financing of small and micro enterprises, which has also made supply chain finance more concerned and policy support as an inclusive financial product and solution.
Following the Regulations on Guaranteeing the Payment of Small and Medium-sized Enterprises issued in 2020, the Administrative Measures for Government Procurement to Promote the Development of Small and Medium-sized Enterprises were officially implemented in 2021, and dozens of provinces have revised the Regulations on the Promotion of the Development of Small and Medium-sized Enterprises, further improving the support for the development environment of small and medium-sized enterprises in terms of laws and regulations. Since May last year, the State Administration of Taxation and the All-China Federation of Industry and Commerce have carried out special actions to help small and micro enterprises develop "Spring Rain Runmiao" in 2021, launching 12 measures in 3 categories and continuously refining the tax reduction and fee reduction policies for small and micro enterprises.
The multi-sector policy "combination fist" helps small and micro enterprises to bail out, and supply chain finance, as an important driver of supply chain digitization and digital economy, will also play a key role in supporting the development of small and medium-sized enterprises. The "two sessions" also first mentioned the development of innovative supply chain finance, and will continue to deepen the application of big data, cloud computing, blockchain, artificial intelligence and so on in the "14th Five-Year Plan".
It is not difficult to predict that policy support continues to increase, emerging technologies continue to penetrate, and supply chain finance is evolving from the past platform operation to the construction of a supply chain finance ecosystem. According to China Insight Consulting, in 2019, the supply chain financial transaction volume processed through supply chain financial technology solutions was 4.4 trillion yuan. It is estimated that by 2024, this scale will reach 16.4 trillion yuan. At that time, the market penetration of supply chain fintech solutions will increase from 9% in 2019 to 20% in 2024. According to the industry's common service fee standard based on transaction size, the revenue scale of supply chain fintech solution providers is expected to reach tens of billions of yuan.
Under the trillion-dollar blue ocean market, giants are competing to enter the market and deeply lay out the supply chain finance business. Alibaba's Ant Group relies on many scenarios such as Alipay, Taobao, Tmall, Youku and many other scenarios within Alibaba to carry out its supply chain finance business. With the opening of Ant Group's "Valley Rain Plan" for the rural financial market, the tentacles of its supply chain financial services have also taken the lead in entering the rural financial market and serving the majority of farmers. Similar to Ali's layout ideas, JD.com's JD Technology will also deeply integrate its supply chain finance business with its business ecology, and carry out services around JD.com's e-commerce and logistics ecology. In September this year, Xu Renyan, the former president of Zheshang Bank, joined Baidu's financial technology company Du Xiaoman as the vice president of the group responsible for the supply chain financial technology business, and concurrently served as the chairman of Du Xiaoman Supply Chain Technology Co., Ltd. The outside world is generally expected that Baidu is also increasing its layout in supply chain finance.
The leading companies in the industry are backed by giants, and their customer base is obviously different. Unlike Ant Group and JD Technology, which mainly focus on the scenarios within the service group system, Lianyirong, which is backed by Tencent, currently has a wide layout in 15 industries such as real estate, manufacturing, infrastructure and energy, providing innovative supply chain financial technology solutions in an online, scenario-based and data-based manner. It is understood that since its establishment in 2016, Lianyirong has served 560 core enterprises, including more than 25% of China's top 100 enterprises, and cooperated with more than 260 financial institutions.
According to the data, in 2020, the market share of Lianyirong among China's supply chain fintech solution providers will reach 20.6%. In April last year, Lianyirong also officially landed on the main board of the Hong Kong Stock Exchange, opening a new journey of supply chain financial technology in the capital market. Behind this series of achievements, it is inseparable from the vigorous development of the domestic market, as a head enterprise, the forward path of Lianyirong is also a microcosm of the development process of domestic supply chain finance.
Scientific and technological personnel account for more than 60%, and LianyiRong builds a technical moat
Since its establishment in 2016, Lianyirong has always been committed to redefining and transforming supply chain finance through technology and innovation, so as to better serve the real economy. Public information shows that In the first half of 2021, Lianyirong's research and development expenditure reached 120 million yuan, an increase of 147.2% year-on-year. At present, the company's technology team has also grown from more than 300 people to more than 600 people, and the proportion of scientific and technological personnel has remained above 60%.
At the same time, as one of the core members of Tencent's To B strategic ecosystem, Lianyirong and Tencent resonate in the exploration and innovation of emerging technologies. Tencent began its research on blockchain technology in 2015 and has built full-service product capabilities from the underlying engine to the upper-level application. At present, Tencent Cloud blockchain technology has perfect products and application solutions in 7 major areas such as supply chain finance, trusted depository, electronic bills, data elements, identity management, supply chain management, and digital assets. As early as 2018, Lianyirong has cooperated with Tencent in supply chain financial technology and blockchain technology, and based on cooperation with Tencent's technology platform, Lianyirong has built several product platforms for core enterprises and financial institutions, such as the "bee control" intelligent digital risk control platform, the supply chain asset consolidation platform, the supply chain financial platform, and the blockchain debt circulation platform.
Relying on continuous R&D investment and the improvement of the underlying technical strength, Lianyirong's artificial intelligence team ranked second in the competition for the financial field at the 2021 China National Knowledge Graph and Semantic Computing Conference, and its self-developed enterprise-level data security collaboration platform Bee Secret Privacy Computing Platform has also passed the two authoritative evaluation certifications of the blockchain-assisted privacy computing products and multi-party secure computing products of the Academy of Information and Communications Technology. In this year's ICDAR competition, known as the "Oscar" in the OCR field, the self-developed OCR technology of the Lianyirong team achieved the third place, second only to Samsung and Huawei.
Continuous improvement of scientific and technological strength also means to help customers reduce costs and increase efficiency with greater precision and efficiency. By accurately applying ABCD technology to the actual pain points of supply chain finance business, Lianyirong has achieved nearly 100 AI automation applications in the asset processing and review of supply chain asset securitization, with an automation rate of more than 90%. In addition, rich business scenarios and business time also provide a large amount of data support for the improvement of AI algorithms, and further optimize the technology.
In September 2021, the monthly asset processing scale of Lianyirong exceeded 30 billion yuan, reflecting the efficiency improvement brought about by the application of core technologies such as ABCD.
In the future, Lianyirong said that it will continue to maintain high-tech investment and will focus on building a low-code platform. Through the application of low-code technology, it helps more developers to use open source code to build an ecosystem, integrate all aspects of capabilities and resources, and help more customers and scenarios to achieve technological upgrading in supply chain finance business.
Domestic and foreign business has blossomed in an all-round way, and Lianyirong has opened a globalization strategy
Only by constantly going deep into the industry and gaining insight into the real needs of customers can we truly create value. In 2021, Lianyirong continued to develop and promote innovative products and solutions, and launched a supply chain asset control platform to help core enterprises build a supply chain data middle platform. In addition, Lianyirong has also landed a number of innovations such as the micro-ticket cloud solution, the first digital yuan project in the field of multi-level circulation of supply chain creditors, and the blockchain-based aircraft leasing supply chain management platform. It is understood that the landing of new projects in Lianyirong has been accelerating, including recent cooperation with many core enterprises such as Yuexiu Group, Jiangling Motors Group, Zijin Mining and China Chemical Engineering Group to build a supply chain collaboration platform.
The International Finance Corporation (IFC) estimates that there is currently a financing gap of $5.2 trillion for SMEs, most of which is in Asia. Lianyirong will also rely on its business layout in Southeast Asia to start the pace of global expansion. In 2021, with the continuous development of international business, Lianyirong began to make great strides into the international market.
At the end of last year, Lianyirong officially announced the establishment of a branch office in Singapore and revealed that it would open a digital bank in Singapore in early 2022. Lianyirong also co-established a Singapore-based joint venture company Haoli with Standard Chartered Bank. Subsequently, Haoli will build a comprehensive digital trade finance platform driven by blockchain to gather and attract institutional investors interested in asset classes related to supply chain finance business.
Lianyirong also recently officially entered the Amazon Seller Central Partner Network of Amazon's cross-border e-commerce platform. After this settlement, Lianyirong's cross-border cloud products will be open to sellers on Amazon's cross-border e-commerce platform. According to reports, by docking amazon public interface, in the case of obtaining enterprise authorization, Lianyirong can directly obtain the historical transaction data of the enterprise from Amazon. For sellers, combined with the front-end compliance export data, through the multi-dimensional evaluation of the risk control engine, the process of submitting the application, approving the loan, and receiving the funds can be completed within one day.
At the same time, Lianyirong can also work with financial institutions to analyze transaction data, solve the problem of sellers' financing difficulties, and help them expand their sales scale. It is reported that Amazon has more than 9.5 million sellers worldwide, and after this cooperation, Lianyirong will also provide export and foreign exchange electronic transaction information declaration services for Chinese mainland cross-border e-commerce sellers.
The global industrial supply chain is entering a period of deep adjustment, which also provides a once-in-a-lifetime strategic development opportunity for supply chain finance. At the same time, with the introduction of financial technology such as ABCD and the proposal of many support policies for small and medium-sized enterprises, the optimization and reconstruction of supply chain finance have new possibilities, and the supply chain finance business of enterprises is expected to continue to be revitalized. Under the gradually clear market prospects, Lianyirong will also continue to clarify the positioning of its own technology solution providers, help the development of the real industry through scientific and technological strength, continuously expand service coverage, and improve product richness, so as to help core enterprises and institutions realize the "four modernizations" of scenario-based, online, digital and ecological future.