According to an insider familiar with the negotiation process of Gitzo Consumer Finance's equity sale, after Peter Cerna, the founder of Gitzo Consumer Finance's parent company, died unexpectedly in March last year, the market began to rumor that the new management team of ——PPF Group may make major adjustments to Gitzo's business strategy in China, including introducing equity partners.
At the end of last year, Katerina Laskova, chief financial officer of PPF Group, publicly stated that for some countries and regions with broad development potential, the Group may continue to operate its business alone, or invite business partners to provide wholesale funds for consumer finance loans.
In the eyes of many people in the industry, the fundamental reason that forced Gitzo Consumer Finance to decide to transfer its equity is not necessarily the sudden change in the business strategy of the new management team of PPF Group, but the sharp decline in the income of various businesses of Gitzo Consumer Finance in the past three years.
Before 20 19, Gitzo consumer finance relied on a wide range of offline business layout and crowd tactics, which made the asset management scale once hit the 100 billion mark and jumped to the top of domestic licensed consumer financial institutions; However, with the change of market environment and the slow progress of its own business transformation, the development of various businesses of Gitzo consumer finance has rapidly entered a "downward trend". By the end of 2020, its asset scale has dropped to 65.207 billion yuan, which means that the asset scale of Gitzo Consumer Finance has shrunk by more than 30% in just one year.
As a result, Gitzo's consumer finance suffered layoffs and loss of business income.
In today's situation, the above-mentioned insiders revealed that there are many factors behind it, including excessive belief that its successful experience in overseas business operations can be successfully replicated in China, and it has not quickly adapted to the changes in the domestic market environment; High-level changes frequently, and online business transformation failed to undertake the business flow brought by crowd tactics and offline layout.
"Now, the new management team of PPF has introduced equity partners for Gitzo Consumer Finance. In addition to hoping to withdraw some funds, another important purpose is to solve many shortcomings in online business transformation with the help of the resource empowerment of Oriental new shares, broaden financing channels, and help Gitzo consumer finance to glow in the second spring. " He thinks.
Success or failure is "offline"
Opportunities are always reserved for those who are prepared.
After 2000, Peter Cerna, the founder of Gitzo Group's parent company, began to fly to China frequently to inspect the development prospect of China's consumer credit market.
In 2004, Gitzo Group, a wholly-owned subsidiary of PPF Group, set up a representative office in Beijing. Three years later, Gitzo's China headquarters was established in Futian CBD.
On February 2, 2065438, Gitzo Group obtained regulatory approval in China to establish a wholly foreign-owned licensed consumer finance company-Gitzo Consumer Finance (China) Co., Ltd. (hereinafter referred to as "Gitzo Consumer Finance").
Since then, with the rapid development of the industry in inclusive finance, China, Gitzo Consumer Finance has rapidly leapt to the leading position of domestic licensed consumer finance by virtue of its first-Mover advantage in the market.
In his view, before 20 18, the offline layout and crowd tactics of Gitzo consumer finance coincided with the rapid development trend of inclusive finance, China. In other words, through extensive offline distribution, Gitzo's consumer finance has successfully captured the consumption enthusiasm of 3C, motorcycles, medical beauty and other people in third-and fourth-tier cities and rural areas, gained huge customer flow and rapidly expanded its business scale. On the other hand, using crowd tactics to promote face-to-face risk control in a wider range can also reduce credit risk to some extent.
The data shows that in 20 16, the asset scale and revenue of Gitzo's consumer finance reached 46.97 billion yuan and 6.826 billion yuan respectively, but by the end of 20 19, these two figures suddenly increased to 104536 million yuan and170.38 million yuan, which made Gitzo.
Therefore, Gitzo's offline business team has been expanding.
"However, this has become a huge burden for online transformation of Gitzo's business." He is outspoken. Specifically, first, since 20 17, a large number of consumer financial products have migrated from offline to online. However, Gitzo still adheres to the offline business development strategy, focusing on competing with peers such as Baiqian for offline market share, and Baiqian was finally acquired at a lower price. Gitzo seems to be "a great victory", but it has lost the best opportunity for online business transformation. The most obvious sign is that in 20 17, Zhaolian Consumer Finance, with the online business layout, although the asset scale is only about 60% of Gitzo Financial's consumption, its net profit is about 15% higher than the latter.
In addition, Internet giants entered the market to promote a large number of online consumer finance products, and began to quickly seize the domestic consumer finance market share, which virtually squeezed the development space of Gitzo business.
Second, the huge offline team is streamlined, which makes Gitzo's consumer finance "exhausted". In 2020, after Gitzo Consumer Finance launched the 2023 Strategy 3354 to promote the online transformation of its business, how to properly handle tens of thousands of offline team employees consumed great energy of Gitzo Consumer Finance and even affected the online transformation process of the latter.
This makes Gitzo's consumer finance quickly change from a market leader to a chaser.
First, the offline operating cost is high, and it is difficult to significantly reduce the interest rate of Gitzo's consumer financial products. The disadvantage of product-side interest rate pricing leads to the loss of some customers;
Second, the market dividend has gradually subsided, which makes the consumer finance market begin to face competition from existing customers. However, many stock customers prefer to use more convenient online consumer finance products, which leads to the shrinking of Gitzo's consumer finance business.
Third, offline products have also begun to encounter operational challenges. For example, people quickly got used to buying 3C products on the e-commerce platform, which led to a continuous decline in business traffic under the traditional offline 3C sales scenario. Due to the increased risk of fraud, the offline medical beauty scene has to stop. In addition, the cash installment service provided by Gitzo Consumer Finance to users with good credit records has also encountered operational twists and turns due to the stricter supervision of cash loans.
"To make matters worse, after the continuous abolition of offline teams, the scale effect created by machine-sea tactics is gone forever, resulting in a continuous decline in business scale, which in turn brings new uncertainty to business operations." The retired Gitzo consumer financier pointed out. The biggest impact is that many business people are decreasing, which makes business development difficult or even "exist in name only".
Cause analysis of "high opening and low walking"
In his view, Gitzo's consumer finance has "stepped off the altar" in just a few years. Another factor that cannot be ignored is the failure to make full use of the golden signboard of "licensed consumer finance".
Especially after the rise of the risk-free lending business model, the average interest rate of related lending products is lower than that of secured lending products, attracting
A large number of high-quality customers flow to the former.
He recalled that since 20 19, Gitzo Consumer Finance began to pay attention to this issue, and tried to increase the issuance scale of ABS products backed by credit assets and realize low-cost financing. However, at that time, the online operation of consumer finance was surging, which made many investment institutions no longer optimistic about the offline model, resulting in Gitzo consumer finance being able to raise funds at a higher cost.
In June 2020, Gitzo Consumer Finance announced that Li Hong, the chief risk officer, had left. In June+10 of the same year, Gitzo Consumer Finance announced that RomanWojdyla would no longer be the general manager of the company and be replaced by OndrejFrydrych.
At the end of February last year, Gitzo Consumer Finance suddenly announced that OndrejFrydrych would no longer serve as the chairman of the company; Two days later, Wang Tao, chief financial officer of Gitzo, also left.
In the eyes of many people in the industry, this has led to more twists and turns in the online transformation of Gitzo consumer finance. After all, executives who are familiar with the business have left because of poor performance, and it will take some time for the new management team to get familiar with the pain points of the development and transformation of various businesses, which leads to a more "slow pace" of online transformation of related businesses.
"The deep-seated reason behind this is that the senior team of Gitzo Consumer Finance firmly believes that its overseas operation experience can be copied to the China market and failed to make timely changes in response to the changes in the market environment in China." The aforementioned Gitzo consumer finance people who have left the company believe that.
For example, the senior team thinks that Gitzo creates credit records for many people, which is equivalent to gaining their loyalty. In fact, with the increase of market competitors, many people will "shop around" and choose other consumer financial products with lower interest rates and more convenient operation; In addition, some executives of Gitzo Consumer Finance believe that huge market share is a very high barrier to competition, but the online operation of consumer financial products has completely changed the original industry structure and given new entrants the opportunity to catch up.
More importantly, Gitzo Consumer Finance continues to adhere to the operating rules of overseas cash installment business, that is, high interest rates cover high risks and create high profits. But in fact, the so-called high-interest products "no longer exist" because licensed consumer financial institutions were once required to implement the upper limit of loan interest rate-4 times LPR. In addition, problems such as long-term lending and fraud risk continue to ferment, which leads to the continuous rise of consumer credit risk in recent years, completely subverting the above operating rules.
The data shows that during the period from 20 17 to 2020, Gitzo Consumer Finance wrote off about 39 10 billion yuan, during which its total profit was only 3.7 billion yuan, the former was more than 10 times that of the latter.
A consumer finance industry insider said that in the era of Internet consumer finance, institutions need to rely on technology to reduce costs and increase efficiency and improve the risk control mechanism in order to obtain sustainable profits. The original model of "solving all troubles with high interest rates" is no longer applicable.
Last year, UniCredit decided to put Gitzo Consumer Finance Entity and "19 Gitzo Consumer Finance Debt 0 1" on the credit rating watch list. The reason is that they believe that the operating performance of Gitzo Consumer Finance in 2020 reveals that its business is in a transitional period, the business scale is shrinking obviously, the stability of executives fluctuates to some extent, asset quality is under great downward pressure, profitability is under pressure, and the future business development trend is uncertain. These factors may affect the company's future business development, risk management, profitability, liquidity and financing environment. In addition, the parent company Gitzo Group suffered heavy losses, and the actual controller of the group died, which may affect the parent company's support for Gitzo consumer finance to some extent.
"Many employees of Gitzo are worried that if we don't accelerate the transformation of the light asset model and decisively divest the huge offline business, the business pressure of enterprises will be more severe in the future." The retired Gitzo consumer financier pointed out that what he didn't expect was that what was waiting for Gitzo was not more drastic business changes, but equity transfer.
Win-win equity transaction?
In mid-April, Gitzo Consumer Finance responded that Gitzo hoped to further strengthen its industry position in China market by looking for powerful equity partners, so as to integrate its business in China market and make its operation more localized.
The above-mentioned insiders believe that this is behind the accidental death of Peter Cerna, the founder of Gitzo Group's parent company, and the new management team of PPF Group made major adjustments to Gitzo's business development strategy in China last year.
"Compared with Peter Cerna who continues to be optimistic about the China market and insists on long-term investment to support the development of Gitzo's consumer finance business, the new management team may be more inclined to withdraw funds and achieve profit returns." He analyzed. After all, the outbreak of the epidemic in 2020 led to twists and turns and uncertainties in the development of consumer credit markets in many emerging market countries. In addition, Gitzo Group's own performance continued to decline, forcing it to "lose its car and protect its handsome".
Last year, the parent company of Gitzo Group, PPF Group, announced that it had completed the transaction with MONETA AirBank for 65.438+0.2 billion US dollars, that is, MONETA acquired the consumer finance business of PPF Group and the P2P company Benxy for 65.438+0.2 billion US dollars, which means that PPF Group "donated" the consumer finance business in the Czech and Slovak markets.
Previously, PPF Group sought a buyer for the business of its credit company Home Credit Bank in Russia. PPF Group also tried to find new partners in Southeast Asia and India, and transferred part of its equity in local consumer credit business by introducing new shareholders.
The reason is that the top management of the parent company of Gitzo Group, PPF Group, needs to allocate resources from a global perspective, especially in the case of its own declining performance, which makes the investment in resources extremely limited and can only sacrifice some emerging market businesses with long-term development potential to "withdraw funds" and invest in business areas that are in urgent need of support and assistance.
Specifically, Gitzo Group, the parent company of Gitzo Finance, submitted a prospectus to the Hong Kong Stock Exchange on July 5, 2065438, and plans to complete the listing in 20 19, with a planned fundraising of 10/500 million US dollars.
It is worth noting that China market business accounts for a high proportion of Gitzo Group's business. 20 16 -20 19 During the end of the first quarter, the loan balance of Gitzo Group in China market reached 5.643 billion euros, 10685 million euros, 12446 million euros and 65438+ respectively. However, due to the strict supervision of consumer finance industries such as P2P in China at that time, the cash loan business was facing rectification, and the future development of many consumer financial institutions was highly uncertain. The listing application of Gitzo Group was delayed, which led to the latter withdrawing its listing application four months later.
"In order to improve the chances of successful listing, Gitzo Group once increased its capital investment and rapidly expanded its offline business team in China to seek a higher business scale. However, due to the unsuccessful listing, Gitzo Consumer Finance was burdened with high operating costs, which forced the new management team of PPF Group to decide to transfer some shares to further alleviate the financial pressure. " The insider analyzed.
In his view, although the current regulatory policies on consumer finance technology tend to be perfect, many licensed consumer financial institutions have quietly started the IPO process. However, in view of the sharp decline in various businesses of Gitzo Consumer Finance in recent two years, its listing is far more difficult than before.
"This is also a win-win deal for every type." The aforementioned Gitzo consumer finance person who has left the company pointed out.
For this listed mutual fund company, having a licensed consumer finance business license will help it to participate in inter-bank fund lending and other businesses, further reduce financing costs and product interest rate pricing, and make its business competition barriers continue to rise. And Gitzo's offline business team will help this listed mutual fund company to speed up the layout of small and micro businesses, because many small and micro self-employed individuals still need offline investigation to understand their latest operating conditions before making accurate lending decisions.
For Gitzo Consumer Finance, the technological empowerment and Internet operation experience of listed mutual gold companies can help it better promote the online transformation of its business and create a lighter asset and smarter business model; For Gitzo's parent company, PPF Group, this means that some funds have returned and can be invested in business areas that they think are more important.
In his view, the equity transfer plan of Gitzo Consumer Finance indicates the end of the extensive development era of consumer finance industry to some extent. With the change of market environment and business model, driven by technology empowerment and online business, the future domestic consumer finance market will enter a new era of fighting for financing cost, fighting for risk control ability, fighting for scene service ability, fighting for market response speed and fighting for new technology research and development ability.
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