China’s JD follows e-commerce rival Alibaba into credit scoring industry
JD.com, China’s second largest e-commerce platform, announced on Friday that it will enter a joint venture with US-based financial technology company ZestFinance to provide credit assessment services to companies in China.
Called JD-ZestFinance Gaia, the new entity will leverage a trove of data, including information on about 100 million active customers on JD.com.
Chinese consumers’ shopping habits, including their purchasing history and even the time purchases were made, will be analysed using ZestFinance’s technology to determine the creditworthiness of Chinese consumers.
The joint venture plans to help lenders in China predict the risks of loaning money to Chinese shoppers, who often have little or no credit history.
Chinese on the lower end of the financial spectrum tend to pay for big-ticket items such as cars and apartments in cash. JD-ZestFinance Gaia hopes to give them greater access to loans by assessing their creditworthiness.
“ZestFinance has … [built] a technology platform that is uniquely able to convert non-traditional data into credit data,” said Jenny Galitz McTighe, a spokesperson for the company.
“In China, the JV will initially be turning shopping data into credit data.”
The move comes amid a push by the Chinese government to encourage more financing options for private businesses and consumers. China’s banking industry has until now been largely State-controlled.
But JD is not the first Chinese e-commerce player to jump into the credit rating market.
Ant Financial, the financial arm of Alibaba, China’s largest e-commerce company, launched a similar credit scoring service in January.
Ant also launched its internet bank MYbank on Thursday, which aims to provide loans to consumers and small businesses.