Czech firm to speed up the development of online business
Home Credit Group, an international consumer finance provider based in the Czech Republic, will invest 6 billion yuan ($921 million) in China to double its business by the end of 2017, the company's chief executive officer said on Monday.
Jiri Smejc spoke exclusively to China Daily as President Xi Jinping arrived in Prague to start an official visit to the country.[Special coverage]
He said that China's economy is restructuring from one driven by investment to one that is boosted by consumption.
The company will increase the number of loan products and accelerate the development of its online business to further diversify its presence in China this year, Smejc said.
To facilitate this move, Home Credit opened a research and development center in Shenzhen, Guangdong province, last year.
"This is a great business opportunity for us as we expect that an entire lending ecosystem will revolve around the smartphone," Smejc said.
"Our immediate goal is to build an independent online lending platform in China that is at least as robust as our physical sales network."
The amount of goods bought on credit offline is, however, still nearly 10 times higher than goods bought over the Internet.
With the services sector accounting for 50.5 percent of China's GDP in 2015, this industry certainly has become a hot destination for foreign investment over the past four years.
China is going through a rapid development of the services sector, particularly through the Internet, which in turn will lead to a sharp increase in the usage of new technologies.
Home Credit, the largest Czech consumer finance provider by assets, entered China in 2007.
It has a registered capital of 3.3 billion yuan and operates in more than 260 cities in 24 provinces and municipalities. As of last year, the company had more than 33,000 employees in China.
"To give you an idea of our business scale, we're talking about loans of 400 million yuan for consumer goods alone. Since 2007, when we came to China, up to the year-end, we have already supported household consumption with some 100 billion yuan in loans for different goods," he said.
Eager to provide more financing services to more micro enterprises and low-income people, the central government has also rolled out a number of reform plans since 2010.
As China is undergoing an industrial boom to diversify its growth model, obviously there is a strong focus on growing domestic consumption, said He Jingtong, a professor of finance at Nankai University in Tianjin. This is exactly where consumer finance can be effective, he added.
"For making a profit, both domestic and global players are keen to secure more market share sooner or later," said He.
