Allen Gu, founder of Renrencaopan.com, talks about his start-ups good and bad timing

Allen Gu Chonglun got off to a bumpy start when he launched Renrencaopan.com, an online platform that connects retail investors and professional traders in buying stocks, amid the stock market meltdown this summer. The platform allows selected “caopanshou” – traders or fund managers – to initiate fund products that invest in stocks. Investors can view details of the funds’ stock positions and returns on the website, and consult the traders and cash out their funds. Gu, 32, who was previously the chief operating officer of the mainland’s leading peer-to-peer lender Renrendai, said the timing of the new venture was bad luck. The ups and downs of the market frightened investors but it was also a challenge to pursue an ambitious vision in difficult circumstances. He spoke to Kwong Man-ki about his attempts to integrate the internet with the traditional brokerage industry amid market turbulence. 

You were in the peer-to-peer lending business before. Why did you turn to stock investment when starting your own company?

I have been working on something relevant to internet finance over the past two to three years and the potential is huge as the internet can help boost efficiency in financial services and improve customers’ experience. However, P2P lending is only part of internet finance – an alternative to bank lending. Some areas remain untapped. Brokerages are one segment offering good business potential amid the internet finance wave. A new business model that gives investors a fresh experience in buying stocks is worth a try. Our team was set up last February when the Chinese stock market was still a bull market and investors were making money. But it was out of our expectation that the market had turned bear when we launched the platform in July.

Q: What are the negative impacts launching Renrencaopan during the stock crisis?

A: If we could launch the platform in the bull market, it would be easier to get better responses from investors. The fund products initiated by our traders would be able to attract more people and help us build a user base much faster.