Internet and 8 business models of supply chain finance
Industry Insights
POSTIME:2017-03-07 14:00:00
Internet and 8 business models of supply chain finance

1.Supply chain finance for B2B ecommerce platform

Domestic ecommerce websites such as focus technology, Wang Sheng Shengyi Bao, Huicong network, Dunhuang network, B2B ecommerce platform such as Shanghai Steel alliance, Finding Steel network, are all scrutinising supply chain finance, looking towards the direction of financial advance.

For example, Finding Steel network had in 2015 launched online its Fat Cat logistics and “Fat Cat white stripes” financial services. “Fat cat white stripe” is targeted at premium buyers that provide “goods first, payment later” collaboration model.  This means Finding Steel network has taken substantial steps in the area of supply chain finance.  To-date, Finding Steel network has accumulated close to four years of customer transactions data, vertical data risk control is Finding Steel’s advantage in supply chain finance.

2.Supply chain finance for B2C ecommerce platform

B2C ecommerce platform such as Taobao, Tianmao, Jingdong, Suning, Yihaodian have gathered retailers’ basic information, historical sales record and other useful data.  This collection of big data have enable the B2C ecommerce platforms to offer supply chain finance to retailers with good credit ratings

Jingdong for example in recent years, has strengthened its internet finance, and supply chain finance is the foundation of its internet finance business.  By differentiating itself and building a logistics system, Jingdong has over the years built up a Jingdong supply chain system driven by big data, which is able to predict sales volume and inventory level, choice of suppliers to automatic pricing.

Singdong supply chain finance makes use of big data and supply chain advantage to offer loans to suppliers, specifically six different models of loan: purchase order financing, inventory financing, pre-settlement receivables financing, commissioned loan model, Jingdong Baobei model, Jingdong small loan model. Jingdong has premium upstream suppliers, downstream consumers, accurate big data, which make Jingdong supply chain finance business successful.

3.Payment for supply chain finance

Payment companies that only want to do payment services are not good companies.  Alipay, Fastmoney, Tenpay, Yeepay, Easternpay and others make use of payment service to get into supply chain finance.  Different from Alipay and Tenpay who have a consumer driven strategy, Fastmoney and some others are focusing on the Business market. Fastmoney for example, started exploring supply chain finance in 2009.In 2011, the company positioned itself as a “payment and finance” business model and launched its supply chain finance services. Fastmoney signed a partnership agreement with Lenovo to help Lenovo consolidate its e-payment and receivables from numerous upstream retailers. Using the data and the supply chain upstream and downstream trade as a backdrop to be the financing condition, creates a system of liquidity capital management solution, which is packaged and sold to the banks. The banks will then, based on this data, provide credit to the small and medium enterprises.

4.Supply chain finance for ERP system

Traditional ERP management software and other IT service companies, such as Yonyou, Chanjet, Kingdee, Digiwin software, NSTC capital management platform, Northsouth software, Futongtianxia, through years of accumulating businesses information, product information, members information, trade information and other big data, eventually built a supply chain ecosystem.

Such as an old timer Yonyou, internet finance is one of the three key strategy of the company. Thousands of SME companies that use the Yonyou ERP system are members of the supply chain finance platform. HAND enterprise is different from Yonyou. HAND’s customers are big companies which HAND provides supply chain finance.

5.Supply chain finance for one-stop shop supply chain management platform

Some comprehensive third party platforms have consolidated business, logistics, settlement, capital into a one-stop shop supply chain management, such as the domestically listed company Eternal Asia, Yihaolian in Suzhou, Huitongda in Nanjing, Alibaba.  These platforms have control over all the information on the supply chain, including logistics and inventory, and have evolved into a powerful data platform.

For example, the listed company Eternal Asia was established in 1997, and is a one-stop shop for supply chain management which has a “two days two area one platform” strategy:  “Two days net” refers to the two internet platforms and, and “Two area net” refers to Eternal Asia’s two supply chain platform 380Shendu distributor platform and Hele life chain supermarket.  One platform refers to Eternal Asia’s B2B+B2C logistics platform.  Eternal Asia restructured the different aspects of supply chain management to create a one-stop shop supply chain management services platform. Through procurement and distributorship, the platform provides loans to logistics customers  similar to a bank inventory loan and earns a spread.  The platform also provides foreign exchange services to those that requires it and earns a sizable income from the appreciating RMB.  Under the foundation of the one-stop shop supply chain management service, the platform of supply chain finance business model is an important source of profit.

6.Supply chain finance for companies that offer SaaS solutions

Companies that provide information on different market segments, offer supply chain finance through the data gathered from the SaaS platform. Such as the domestic retailer bFuture Inc, Holytax, PingAn Bank orangbank eNet business management, Dazhanggui in Ningbo, e-TMS in Shenzhen.

Taking PingAn Bank business management as an example, it is the first domestic free SaaS supply chain cloud platform, and is PingAn orangebank eNet core product. Orange eNet platform allows PingAn supply chain finance to permeate deeper into the entire chain and provide online financing services.

7.Supply chain finance for big business trade zone and logistics zone

Big scale business trading zone rely on massive customers, and based on the transaction data and logistics data as foundation. There are many similar trading zone, such as Shenzhen Huaqiang electronics marketplace, Yiniao small goods city, Haining leather city.

With Zhejiang Yinhuotong as an example, Zhenjiang’s “solidify economy” has a rich history, “Yongkang hardware city”, “Haining leather city”, “Shaoxing textile market”, are all well known “solidify” 

industry. These industry group’s trademark is based on the premise that the downstream micro enterprise lacks the collateral, but has complete upstream and downstream supplychain.  Under this backdrop, Yinhuotong discovered credit within the inventory, and started the first inventory collateral financing. It is the first domestic smart logistics supply chain management inventory financing service platform. At the same time, it introduced “Huoyirong,” “Rongyiguan,” “Xinyicang” as the three main service systems.  Currently Huoyitong, through movable assets mortgage, realised financing of RMB1billion, for a warehouse space of 100,000 square meter, and collateral management of RMB2.5billion.

8.Supply chain finance for big scale logistics companies

Logistics is a big part of commodities trading, which connects the supply chain up- and downstream. Courier companies such as Shunfeng, Changtong, Yuantong, Baishihuitong and logistics companies such as Debang, Huaning, Anneng, have gathered enough data through their massive customers base and are offering supply chain finance service.

Taking Shunfeng as an example, in March 2015, Shunfeng launched a full scale country-wide more than a hundred warehouse providing split warehouse storing.  At the same time it launched its warehouse storage financing service.  If premium electronics retailers store goods at Shunfeng’s warehouse, they can enjoy not just “just-in-time delivery,” but can also customers can get a loan on the goods stored in the warehouse. Shunfeng’s massive logistics network, close knitted warehouse service points, and refreshing finance service completes the three-point logistic service closed loop.  Besides warehouse storage finance, Shunfeng supply chain finance also provides receivables financing.