Qupital wants to finance more Chinese cross-border e-commerce merchants by tapping Hong Kong’s capital market

China’s cross-border e-commerce merchants are largely underfunded despite Beijing’s push to boost the industry, according to Hong Kong-based lending start-up Qupital, which is hoping that its access to the city’s established capital market provides an answer.

Founded in 2016, Qupital offers offshore US dollar loans to Chinese merchants selling their products on overseas marketplaces including Amazon.com, eBay and Lazada.

Thanks to the rapid growth of cross-border e-commerce, Hong Kong’s less stringent online lending rules than the mainland and its mature financial market, Qupital’s credit offered has grown 200 per cent so far this year against the same period a year ago, co-founder and chief executive Winston Wong told the South China Morning Post in an interview.

Wong said the credit his firm has offered, has been at an “average of 90 days with an annualised interest rate of between 6 and 18 per cent”.

In 2020 China’s cross-border e-commerce reached 1.69 trillion yuan (US$265 billion), a 31.1 per cent increase from the previous year, China Customs spokesman Li Kuiwen said at a press conference in January this year. Exports accounted for 1.12 trillion yuan, growth of 40.1 per cent from 2019, according to Li.

Beijing also sees cross-border e-commerce as a growth driver for trade, with developing cross-border e-commerce mentioned in the country’s 14th five-year plan. The Ministry of Commerce’s 14th five-year plan for e-commerce development also proposed a range of measures to boost cross-border e-commerce, including improving inventory, logistics, payment and data infrastructures, and setting up more pilot zones.