Chapter 2 Statistic Analysis of China s Crowdfunding Industry

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1 Chapter 2 Statistic Anaysis of China s Crowdfunding Industry Zhi Chen, Haimei Wang and Xingqiang Yuan 2.1 The Genera Status of Crowdfunding Patforms The Number and Distribution of Patforms By the end of September 2016, there were 415 crowdfunding patforms with norma operations in China, which was 100 patforms more comparing with the number at the end of According to the first three quarters data in 2016, the tota number of the patforms grew steadiy, and it is expected that, by the end of 2016, the number of crowdfunding patforms in China with norma operations coud exceed 450 (Fig. 2.1) The Registered Capita of Patforms By the end of September 2016, among the 415 crowdfunding patforms with norma operations, 42% of them fied with the Industria and Commercia Administration with the registered capita between RMB 10 miion and RMB 50 miion, foowed by the group of patforms with the registered capita between RMB 1 miion and RMB 5 miion (19%); the number of the patforms with the registered capita between RMB 5 miion and RMB 10 miion is accounted for about 17%; and the patforms with the registered capita between RMB 50 miion and RMB 100 miion and those with the registered capita more than RMB 100 miion are accounted for 11% and 8%, respectivey; and finay, the patforms with the registered capita ess than RMB 1 miion are ony accounted for 3%. Z. Chen (&) H. Wang X. Yuan Shanghai Wenxi Investment Consuting Co., Shanghai, China e-mai: chenzhi@wdzj.com Springer Nature Singapore Pte Ltd J.G. Wang et a. (eds.), Financing from Masses, 13

2 14 Z. Chen et a. Fig. 2.1 Number of crowdfunding patforms in China with norma operations. Data Source www. yingcanzixun.com Fig. 2.2 Distribution of registered capita of patforms with norma operation. Data Source www. yingcanzixun.com At present, the average registered capita of crowdfunding patforms is more than RMB 1 miion, whie most patforms have a registered capita between RMB 5 miion and RMB 50 miion, and ony a few ones with the registered capita ess than RMB 1 miion (Fig. 2.2).

3 2 Statistic Anaysis of China s Crowdfunding Industry The Amount of Funds Successfuy Raised by Patforms In 2015, the crowdfunding industry in China raised RMB biion in tota, which broke the mark of RMB 10 biion for the first time in history, and was 5 times more than the amount of funds raised in From January 2016 to September 2016, the crowdfunding industry in China raised RMB biion in tota, which exceeded the tota amount of funds raised in the whoe year of It was expected that, by the end of 2016, the amount of funds successfuy raised in the entire 2016 wi exceed RMB 15 biion (Fig. 2.3). 2.2 Some Anaysis of the Deveopment of Crowdfunding Patforms The Types of Crowdfunding Patforms By the end of September 2016, among the 415 crowdfunding patforms with norma operations, there were 207 reward crowdfunding patforms, increasing by % compared with year end number of 2015; there were 131 equity crowdfunding or non-pubic equity financing patforms, which was pretty much same as the number at the year end of 2015; the number of charity crowdfunding patforms increased by 62.5% compared with 2015; and the number of mixed-type (containing more than one type) crowdfunding patforms decreased by 13.92%, compared with 2015 (Fig. 2.4). Fig. 2.3 The amount of funds raised by crowdfunding industry in China over the years. Data Source

4 16 Z. Chen et a. Fig. 2.4 Comparison of different types of crowdfunding patforms in China. Data Source www. yingcanzixun.com The Successfu Crowdfunding Projects From January 2016 to September 2016, the crowdfunding industry in China successfuy competed 53,600 projects in tota, increased by % compared with the number in the whoe year of Among them, 39,908 are reward crowdfunding projects, 9911 are charity crowdfunding projects, and both of them increased compared with Meanwhie, 3732 non-pubic equity financing projects are successfuy competed, and the number is basicay equa to that of projects successfuy competed in 2015 (Fig. 2.5). Fig. 2.5 Comparison of various types of successfu crowdfunding projects in China. Data Source

5 2 Statistic Anaysis of China s Crowdfunding Industry The Amount of Funds Raised From January 2016 to September 2016, the crowdfunding industry in China successfuy raised RMB biion. Among that, the amount of reward crowdfunding accounts for more than 50%, up to RMB biion, which we exceeds the amount of funds successfuy raised via reward crowdfunding in the whoe year of 2015; the amount of equity crowdfunding reached RMB biion, which was about 90.12% of that in 2015; and the amount of charity crowdfunding was ess than that of 2015, with RMB 321 miion (Fig. 2.6) The Number of Crowdfunding Investors From January 2016 to September 2016, the number of investors of crowdfunding industry in China reached miion, exceeding the number of investors at the end of year Among them, the number of investors in reward crowdfunding showed fastest growth, reached miion; the number of investors in charity crowdfunding in the first nine months of 2016 exceeded that of 2015, even though the amount of funds raised by charity crowdfunding ony accounted for 50.87% of that of 2015; as the equity crowdfunding has a higher threshod and stricter poicy constraint, ony 9800 investors participated during this period of time, which was ess than 50% of that of 2015 (Fig. 2.7). Fig. 2.6 Comparison in amount of funds successfuy raised by various types of crowdfunding in China. Data Source

6 18 Z. Chen et a. Fig. 2.7 Comparison in number of crowdfunding investors in China. Data Source www. yingcanzixun.com 2.3 The Statistics of Regiona Deveopment The Number of Patforms by Provinces By the end of September 2016, the crowdfunding patforms in China were distributed in 28 provinces/cities, most of which are the economicay deveoped coasta areas. As the eariest deveopment area of crowdfunding, Beijing and Guangdong had obvious concentration effect, with the argest number of patforms with norma operations in China. According to a quartery statistics of Yingcanzixun.com, a primary internet finance porta in China, Guangdong ranks the top with 92 patforms; foowed by Beijing with 88 patforms; Shandong ranks the third and Shanghai the fourth, with 57 patforms and 49 patforms, respectivey; Zhejiang ranks the fifth with 28 patforms; and Jiangsu ranks the sixth with 23 patforms. Guangdong, Beijing, Shandong, Shanghai, Zhejiang and Jiangsu are the top six in China in terms of the number of patforms with norma operations, accounting for 81.20% of the tota number of patforms with norma operations a over the country (Fig. 2.8) Fundraising Scae by Provinces From January 2016 to September 2016, Beijing, Guangdong and Zhejiang ranked the top three for the amount of funds raised by crowdfunding patforms in China, with funds raised up to RMB biion, RMB biion and RMB biion, respectivey. Among them, the amount of funds raised by Guangdong

7 2 Statistic Anaysis of China s Crowdfunding Industry 19 Fig. 2.8 The number of patforms by provinces in China. Data Source and Zhejiang exceeded that of Shanghai ranked the fourth, with the funds raised up to RMB biion; and Jiangsu ranked the fifth, with funds raised up to RMB 947 miion. The sum of the amount of funds raised by the 5 provinces and cities above accounted for 88.24% of tota amount of funds raised by the entire country. These five provinces and cities are the most economicay deveoped areas in China with much stronger investment consciousness and poicy support from oca governments. As a resut, the scae of the crowdfunding in China is expected to be sti argey determined by these provinces and cities in a short and medium term. Meanwhie, the other 23 provinces and cities with crowdfunding patforms ony raised RMB biion in the same period of time with significant regiona differences (Fig. 2.9). 2.4 Some Anaysis of the Primary Business of Crowdfunding Patforms The Distribution of Primary Business of Patforms The primary business of China s crowdfunding patforms can be divided into two categories: one is the comprehensive patform invoving mutipe industries or fieds such as high tech, agricutura products, and fim and teevision, and the exampes incude JD Crowdfunding and Taobao Crowdfunding. Another one is the more concentrated, professiona, and vertica crowdfunding patform, which focuses on sub-industries or fieds, such as arts, specific agricutura products, entertainment,

8 20 Z. Chen et a. Fig. 2.9 The fundraising scae by provinces in China. Data Source automobies, and rea estate. In particuar, the patforms focusing on automobie crowdfunding mushroomed in According to a quartery statistics of Yingcanzixun.com, by the end of September 2016, among the 415 crowdfunding patforms with norma operation in China, 241 comprehensive type of patforms ranked the top, accounting for 58.07% of the tota patforms, foowed by 82 patforms focusing on automobie crowdfunding, accounting for 19.76; 25 patforms focusing on fim and teevision crowdfunding ranked the third, accounting for 6.02%; and 21 patforms focusing on physica store crowdfunding, with a percentage cose to the fim and teevision focused patforms; the charity crowdfunding patforms ranked the fifth with 12 patforms, accounting for 3.13% of the tota number of patforms; and the rea estate focused crowdfunding patforms ranked the sixth with 12 ones; however, due to some poicy reated reasons, some of these patforms temporariy stopped updating their information. In addition, there were aso 10 agricutura focused crowdfunding patforms, and 1 2 other vertica crowdfunding patforms in some subdivided fieds (Fig. 2.10) Some Anaysis of Projects of Comprehensive Patforms According to a quartery statistics of Yingcanzixun.com, by the end of September 2016, the crowdfunding patforms, as indicated earier, are more incined to invove in mutipe business fieds simutaneousy. Among the 241 comprehensive patforms, 53 patforms invoved in agricuture, primariy agricutura products; 40 patforms conducted physica store projects; 36 patforms participated in charity crowdfunding; 27 patforms dabbed in fim and teevision projects; and ony 5

9 2 Statistic Anaysis of China s Crowdfunding Industry 21 Fig Distribution of concentrations of the patforms. Data Source Fig Anaysis of projects of comprehensive patforms. Data Source comprehensive patforms isted automobie projects, and 4 patforms posted rea estate projects. It can be seen that the automobie and rea estate projects are more ikey financed through these more speciaized vertica patforms. In contrast, agricutura products crowdfunding are generay conducted through comprehensive patforms, instead of vertica patforms (Fig. 2.11). 2.5 The Anaysis of Bankrupt and Transformed Patforms According to a quartery statistics of Yingcanzixun, from 2015 to the end of September 2016, 174 crowdfunding patforms went bankruptcy (i.e. the patform s website cannot be opened for more than 30 days or crowdfunding modue no onger

10 22 Z. Chen et a. Fig Number of bankrupt and transformed patforms: 2015 January Data Source exists), and 34 crowdfunding patforms are transformed to non-crowdfunding patforms. For these bankrupt patforms, 40 patforms went bankrupt in 2015, and 134 patforms went bankruptcy from January 2016 to September 2016, which is about 3 times more than the tota number of bankrupt patforms in As showed in Fig. 2.12, from March 2016 to September 2016, more than 10 patforms went bankruptcy each month on average, and as many as 25 patforms went bankruptcy in Juy aone. The primary reasons for these bankruptcies are found to be that, with a smaer scae in size, these patforms coudn t compete with these giant patforms in resources, but faied to timey adjust their business focuses. When the poicies towards the crowdfunding became stricter, it was difficut for these patforms to continue their operations. It woud be worth mentioning that an important contributing factor for more bankruptcy between March and September in 2016 is the poicy change during that period of time. As mentioned in earier sections, poicies issued then prohibited rea estate crowdfunding, and P2P onine ending patforms were not aowed to be engaged in equity crowdfunding, either. As a resut, many P2P onine ending patforms took out their crowdfunding modues, and crowdfunding patforms removed their rea estate modues. In addition, the bankruptcy of these patforms is aso reated to the specia rectification and investigation of internet finance industry taken by reguators. For these transformed crowdfunding patforms, the post-transformed businesses primariy incude: P2P onine ending, periphera services of crowdfunding, entrepreneuria trainings, socia networks, group purchases, e-trading, ottery, product suppier, and advisory service for weath management products.

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