Abstract: Doing finance and doing e-commerce platforms are two completely different concepts, and the comparative advantages required are also different. At present, the adjustment of banks to e-commerce business is a rational return after a period of development
At a time when major Internet e-commerce platforms are warming up for the "618 Mid-Year Promotion", some banks have pressed the "stop button" for their e-commerce platform business.
On May 30, ICBC (hereinafter referred to as "ICBC") issued two announcements pointing out that its e-commerce platform "Rong e-purchase" personal mall related services, as well as corporate mall public sales, business circle sales, cross-border trade and other related services, will be stopped at 24:00 on June 30.
For the above reasons for the suspension of business, according to Sina Finance, the adjustment is related to regulatory requirements. Previously, the regulatory authorities explicitly required banks to divest non-bank businesses, and banks were not allowed to establish non-financial business subsidiaries. At present, the bank-related e-commerce business has been effectively suspended or completely divested according to regulatory regulations.
A number of bank insiders told Caijing that they did receive regulatory "window guidance" before, requiring banks to divest non-bank businesses. "The supervision emphasizes that the self-operated platform must be separated from the bank entity, and considering the actual situation, the bank will either replace the platform with the operating entity to continue, or choose to directly cut off this business." An insider of a state-owned large bank said.
As of the press release of the Caijing reporter, ICBC has not responded to the reasons for the suspension of business.
The "Finance" reporter noted that in addition to ICBC's "financing and e-purchase", some banks have divested e-commerce-related businesses. For example, the Agricultural Bank of China's "Agricultural Bank of China Poverty Alleviation Mall" (now "Xingnong Mall") was operated by ABC Financial Technology Co., Ltd. after January 1 this year; Since April 25 this year, the operating entity of CCB's "Shanrong Commerce" platform has been changed to Jianxin Financial Services Technology Development Co., Ltd.
In recent years, the development of banking e-commerce platforms has been summarized by the market as "tepid", which contains multiple reasons behind it. Some bankers bluntly said that doing finance and doing e-commerce platforms are two completely different concepts, and the comparative advantages required are also different. At the same time, compared with e-commerce companies, the bank's management system, cultural concept, cost management and other models are completely different, so it may not be suitable for the development of this business. At present, the adjustment of banks to e-commerce business is a rational return after a period of development.
ICBC presses the "Stop button"
"I haven't used it." After the "Caijing" reporter mentioned to a number of mobile banking users that "financial e-purchase" and "banking e-commerce platform", this is the reply content of most people.
In fact, before the suspension of personal malls and other related services, ICBC's "Financing e-Purchase" has been online for eight years (launched in January 2014).
According to public information, the B2C e-commerce platform of "Rong e-purchase" is positioned as "famous businessmen, famous products and famous stores", integrating online shopping and consumer credit. At the same time, ICBC has also developed a "financing e-purchase" B2B platform for corporate customers, providing market models such as supply chain and professional wholesale.
In 2015, Hou Benqi, then general manager of the electronic banking department of ICBC, said in an interview with the media that "rong e-purchase" has become an important platform for the strategic transformation of some merchants, and some well-known merchants have begun to shift the main battlefield from traditional e-commerce websites based on price wars to "quality first" "financial e-purchase", and the transaction share has gradually exceeded its sales proportion on other e-commerce platforms.
It can also be seen from the past public information that "Rong e-purchase" has achieved good results at the beginning of the launch. According to the annual report of ICBC, in 2014, there were more than 12 million registered customers of "financing e-purchase", and the transaction volume exceeded 70 billion yuan. ICBC said that "'Rong e-purchase' ranks among the forefront of domestic e-commerce." Since then, from 2016 to 2018, the annual transaction volume of ICBC's "rong e-purchase" e-commerce platform has been 1.27 trillion yuan, 1.03 trillion yuan and 1.11 trillion yuan, respectively. As of the end of 2019, the number of "financing e-purchase" users reached 146 million.
In contrast, in the annual report of ICBC in the past two years, relevant data such as the annual transaction volume and the number of users of "financing and e-purchase" have rarely appeared.
On December 29, 2021, ICBC announced that it will upgrade the functions of the "Rong e-purchase" personal mall, and after the upgrade, it will close the pure cash purchase mode of non-self-operated goods or services.
According to the announcement released by ICBC on May 30, the related services of the "Rong e-purchase" personal mall and related services such as public sales, business district sales, and cross-border trade of the enterprise mall will be stopped at 24:00 on June 30. For individual users, if they need to redeem points, purchase precious metals and donate to the public welfare, they can log on to Mobile Banking; For enterprise users, service functions such as bill brokerage, ICBC collection and judicial auction are migrated to the homepage of the ICBC portal website.
For the business adjustment of ICBC, Pan Helin, co-director and researcher of the Digital Economy and Financial Innovation Research Center of the International United Business School of Zhejiang University, told caijing reporter, "ICBC focused on the main business and stripped the side business, indicating that the side business operation is not very smooth, and the original goal has not been achieved through the integration of the e-commerce financial ecology, and it has to make a trade-off." In addition, the divestiture of side businesses is also in response to regulatory requirements. ”
There are also views that ICBC's adjustment may not be directly related to supervision, and the main reason is that banks do not have a comparative advantage in carrying out e-commerce business.
Banking e-commerce "cold"
In fact, although ICBC is only making business adjustments, it has attracted much market attention, because it reflects the development status of the entire banking e-commerce system.
In recent years, with the gradual improvement of information communication, logistics and payment systems, the transaction scale of the online shopping market has grown rapidly. At the same time, the business of mainstream e-commerce enterprises began to penetrate into the financial field, which brought impacts and challenges to the operation of the traditional banking industry. Banks are waking up from a dream and trying to enhance customer stickiness through self-built e-commerce platforms.
In 2012, CCB established the first banking e-commerce platform in China, Shanrong Commerce, which opened a precedent for the development of banking e-commerce business. Since then, platforms including bank of communications "Jiaobohui", Agricultural Bank of China "E Business Steward", Bank of China "Bank of China Easy Business", Industrial and Commercial Bank of China "Rong e Purchase", Everbright Bank "Purchase Wonderful" and other platforms have been launched.
"Judging from the situation at that time, there was a great desire to compete with Internet e-commerce companies." A medium-sized bank insider told Caijing that after years of development, the banking e-commerce platform that was originally pinned high hopes on is now not developing satisfactorily.
There are many reasons behind this. Some bankers believe that on the one hand, the contribution of e-commerce business to the middle income of banks is insufficient, and the proportion of income is not high, so the banking e-commerce platform has always been on the fringes of banking business; On the other hand, the banking e-commerce platform has a big gap with large e-commerce enterprises in terms of function construction, product system, customer experience, warehousing, logistics, etc.
However, in the eyes of many people in the financial industry, banks do not do e-commerce platforms themselves for profit. "The banking e-commerce platform is a way for banks to build their own scenes, and ultimately to serve financial business. The positioning of banking e-commerce platforms is mainly to serve customers, enhance customer stickiness, and accumulate customer data, rather than aiming at maximizing sales. Some people in the financial industry analyzed and pointed out.
Dong Ximiao, chief researcher of CmLCC Finance and part-time researcher of the Institute of Finance of Fudan University, said in an interview with Caijing that the bank's creation of e-commerce platforms is not for direct profit purposes, mainly for two reasons: The first is to serve customers and better meet the needs of C-end and B-end customers; The second is to generate data that complements some of the bank's own structured data to better gain insight into customer behavior and drive product and service innovation.
Based on the above situation, the Caijing reporter noted that in recent years, some banks have either chosen to directly shut down their e-commerce platforms, or integrate the e-commerce platform with the Bank's mobile banking or credit card malls.
"In fact, behind this also involves the issue of bank opening. Now many banks choose to cooperate with third-party platforms, because they are not willing to let customers be robbed by Internet companies, first go to the 'test' e-commerce platform, only to find that they can't do it, and finally can only accept to do it with more scene parties. Earlier, an executive of a joint-stock bank told The Finance reporter.
Where to go from here
It is based on the above reality that an insider of a large state-owned bank told caijing that after the supervision of "window guidance", some banks will replace their e-commerce platforms with operating entities to continue, or choose to directly shut down this business.
"Previously, banks hoped to imitate e-commerce platforms and gradually evolve financial services from e-commerce, thus forming a closed-loop ecology of 'four-in-one' of information flow, business flow, capital flow and logistics, thus having a more competitive advantage in the scene." Zeng Gang, director of the Shanghai Finance and Development Laboratory and deputy director of the National Finance and Development Laboratory, said in an interview with Caijing that doing finance and doing e-commerce platforms are two completely different concepts, and the comparative advantages required are also different. At the same time, compared with e-commerce companies, the bank's management system, cultural concept, cost management and other models are completely different, so it may not be suitable for the development of this business.
From the perspective of comparative advantage, the banking e-commerce has not met the initial expectations, and is more evolving in another direction. Zeng Gang further pointed out that with the development of time, the competitive focus of banks has been adjusted. For example, China Merchants Bank's "Pocket Life" App has basically formed a life scene, which enhances customer stickiness and activity by providing convenience and preferential treatment to customers. Therefore, for banks, to do a large and complete e-commerce, the formation of a "four-in-one" closed-loop model, may not be as good as doing an open life scene on the App.
On the other hand, with the strengthening of supervision, the closed-loop model is facing certain challenges, and Internet companies must split up out of specifications. In this context, the pressure on banks to imitate e-commerce to build a closed-loop ecology will be reduced. "Now that the need to build a closed loop is not so great, coupled with the lack of comparative advantage, this time should be more reasonable to look at their own capabilities." Zeng Gang said.
"Cutting this piece of business is a very realistic choice, because the bank has been doing it for many years and can't do it; There is not much improvement in continuing to retain this piece of business, just a channel to interact with users. The above-mentioned state-owned bank insiders believe that "the essence is still that the scene is the short board of the bank." In recent years, the market often mentions the achievements of CMB in the scene, such as the Pocket Life App, but many people do not see that behind it is CMB investing a lot of money, which cannot be copied. ”
According to CMB's 2021 annual report, as of the end of the reporting period, the cumulative number of users of the Pocket Life App was 127 million. During the reporting period, the number of daily active users of Pocket Life App peaked at 7.4773 million, and the number of monthly active users at the end of the period was 45.9344 million, ranking first in the same industry credit card app.
As for whether it will carry out relevant business in the future, and whether there are other plans, as of the press release of the "Caijing" reporter, ICBC has not responded.
Dong Ximiao believes that the cessation of services by individual bank e-commerce platforms does not mean that banks will no longer explore this business in the future. "To have an accurate positioning, such as some small and medium-sized banks, in order to create a local life circle or in order to serve the revitalization of rural areas will also launch e-commerce platforms, in this regard I think there will be further exploration."
In Zeng Gang's view, the current adjustment of banks to e-commerce business is a rational return after a period of development. "Abandoning this field may be a good thing, not doing e-commerce does not mean not cooperating with e-commerce, banks should be more open-minded, the e-commerce services integrated into their own customer needs or life scenarios, so as to better improve the customer experience, while improving efficiency while more fully exerting their comparative advantages." Zeng Gang said.