Qudian Inc. is a leading provider of online small consumer credit in China. We use big data-enabled technologies, such as artificial intelligence and machine learning, to transform the consumer finance experience in China. With the mission to use technology to make personalized credit accessible, we target hundreds of millions of young, mobile-active consumers in China who need access to small credit for their discretionary spending, but are underserved by traditional financial institutions due to lack of traditional credit data and operational inefficiencies of traditional financial institutions. We believe our data technology capabilities combined with our operating efficiencies allow us to understand our prospective borrowers from different behavioral and transactional perspectives, assess their credit profiles with regard to both their willingness and ability to repay and offer them instantaneous and affordable credit products with customized terms and distinguish our business and offerings.
Currently, we offer cash credit products that provide funds in digital form and merchandise credit products. We mainly generate financing income from cash credit products, and service income and sales commission fees from merchandise credit products.
We are the largest online provider of small cash credit products in China in terms of the number of active borrowers and the amount of transactions in the six months ended June 30, 2017. Small credit products serve consumers’ immediate needs for discretionary consumption. They typically have short durations, enabling us to quickly understand a borrower’s behavior and further refine our data analytics and credit assessment model upon the completion of transaction cycles.
We operate a pure online platform, with nearly all of the transactions facilitated through mobile devices. Prospective borrowers can apply for credit on their mobile phones, and receive approval within a few seconds. Approved borrowers are then able to draw down their cash credit with cash disbursed immediately into their Alipay accounts in digital form. Borrowers also repay credit drawdowns through their Alipay accounts. To complement our cash credit products, we offer merchandise credit products to finance borrowers’ direct purchase of merchandise offered on our marketplace on installment basis. Through collaborating with more than 480 merchandise suppliers, we offer an expanding range of product categories ranging from consumer electronics products to watches and sports and outdoor products to capture approved borrowers’ growing consumption demand and enhance their online shopping experience.
We aggregate our borrowers’ behavioral data with data and credit analyses from various partners as inputs for our credit assessment model. As an innovator in the application of artificial intelligence to financial services, we utilize machine learning to accurately assess borrowers’ credit profiles. We focus on data analyses that not only reflect borrowers’ ability to repay loans, but also their willingness to do so. These analyses are based on prospective borrowers’ social and shopping behavioral data, among others, in addition to the characteristic metrics such as locations and demographics.
The short-term nature of our credit products contributes to frequent repayments and repeat borrowing activities, which drive the volume and comprehensiveness of the data we collect and analyze. Our machine-learning based approach enables us to continuously refine our credit assessment model based on insights from the high volume of transaction data that we collect.