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Retailer Consumer Finance and Banking in the Asia-Pacific Region is a report, based on a survey of over 1,500 prominent retail brands in 14 countries, about the provision of consumer finance at the point of sale by major retailers. Retailer initiatives in savings deposits, personal loans, mortgages and international remittances are also considered.

Countries covered are Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

In total, the research identifies over 150 consumer finance schemes and over 70 product initiatives in retailer banking, thereby providing a definitive analysis of retailer consumer finance and banking in the Asia-Pacific region that goes far beyond the scope of previous published research.

Moreover, the PartnerBASE™ dataset that accompanies the report details each of the many retailer consumer finance and banking programs traced by Finaccord, specifying the operating models used by retailers and the identities and ultimate holding companies of the ultimate product providers in each case.

Key findings from the executive summary include:

- consumer finance schemes are most widespread among major retailers in New Zealand given a provision rate of 18.9%, followed by China at 16.7% and Japan at 16.4%;

- retail brands in the consumer electronics category are the most likely to offer consumer finance with a provision rate of 33.9%, followed by retailers of DIY, furniture and home products (20.2%) and department store and variety retail brands (16.9%);

- across the various retailer banking initiatives identified, over three quarters involve captive partners alone – with Japan's AEON Bank, Rakuten Bank and Seven Bank among the most notable of these – while the remaining 22.7% involve single external partnerships with banks;

- 29 major retail brands (or 1.9% of those surveyed) offer international remittance services with Western Union used as a direct provider in 14 cases and as a joint venture partner in the case of Seven & I's Seven Bank International Money Transfer.

Table Of Contents

Retailer Consumer Finance and Banking in the Asia-Pacific Region
TABLE OF CONTENTS
0.0 EXECUTIVE SUMMARY ...1
1.0 INTRODUCTION 3
What is this report about? 3
Rationale 3
Rationale arises both from factors specific to consumer finance and banking…3
… and from dynamics in the retailing market itself...3
Methodology 4
Survey of retailers 4
The survey's scope covers over 1,500 major retail brands drawn from ten categories and 14 countries…..4
… and classified according to their use of offline-only, online-only or mixed distribution models ..4
Definitions 6
Consumer finance and banking 6
Operating models 6
Weighted shares 6
PartnerBASE 7
Finaccord 7
2.0 REGIONAL OVERVIEW8
Consumer finance 8
Just under 10% of major retail brands have an arrangement for non-card point-of-sale finance...8
... with involvement rates highest among retailer categories selling higher value products9
... and among retailers with a mixed distribution model as opposed to a purely offline or online one9
Over 80% of consumer finance programs in the region are based on use of external partners..12
... albeit a number of retail brands fund consumer finance on an internal basis... 12
… and several captive entities are also in evidence ..12
The strength of JACCS in Japan makes it prominent in both the unweighted and weighted analysis 13
Banking products 15
Overview 15
A comparatively small number of brands have introduced general banking products or services...15
... with those in Japan most likely to be active in this sphere.15
Personal loans, mortgages and savings accounts 16
Where available, products are usually sourced from captive banking partners16
… with these most numerous among retail brands in the supermarket / hypermarket category.18
Through Rakuten Bank and Seven Bank respectively, Rakuten and Seven and I are especially visible ...20
International payments / remittances 22
A significant number of major retail brands have set up international payment or remittance services...22
... with those in Thailand and the Philippines most likely to have done so22
... and with Western Union involved in many of these initiatives25
3.0 AUSTRALIA..26
Introduction 26
Consumer finance 27
Retailer provision rates for point-of-sale finance are below those for credit or other payment cards...27
inRent, RentSmart and Flexirent boast the most partnerships as external providers...27
... with HSBC assuming greater prominence in weighted terms ...28
FlexiGroup incorporates a range of companies involved in providing finance and payment solutions28
Over a third of retail brands in one category offer point-of-sale finance to customers..28
Banking products 31
Overview 31RETAILER CONSUMER FINANCE AND BANKING IN THE ASIA-PACIFIC REGION
II
Only two major retail brands in Australia offers mainstream banking products to their customers ..31
Personal loans, mortgages and savings accounts 31
International payments / remittances 34
4.0 CHINA36
Introduction 36
Consumer finance 37
The provision rate among major retailers for point-of-sale finance has tripled since 2010...37
China Merchants Bank emerges as a leader in this field in both unweighted and weighted terms... ..37
... with nine other providers apparent, two of which are classifiable as captives...38
Three categories lack any retail brands with involvement in non-card consumer finance40
Banking products 42
Overview 42
Half a dozen major retail brands in China offer general-purpose personal loans to their customers…...42
Personal loans, mortgages and savings accounts 42
… with all six relying upon captive partners in this context 42
China Resources Bank acts as a captive provider for three retail brands belonging to its own parent43
International payments / remittances 46
Western Union is used as partner by two of the retail chains researched in China..46
5.0 INDIA .48
Introduction 48
Consumer finance 49
Major retailers in India are less likely to offer point-of-sale finance than co-branded credit cards49
Bajaj Finserv is easily the most significant provider of point-of-sale finance in the retail sector...49
... and its share of partnerships is even higher when viewed in weighted terms ..50
Retailers of consumer electronics feature the highest provision rate for consumer finance.51
Banking products 53
Overview 53
A small number of major retail chains offer international remittance services through Western Union ...53
Personal loans, mortgages and savings accounts 53
International payments / remittances 53
6.0 INDONESIA...56
Introduction 56
Consumer finance 56
Banking products 56
Overview 56
Hypermart has introduced a savings account in partnership with CIMB Niaga56
Personal loans, mortgages and savings products 57
International payments / remittances 60
... and Indomaret promotes an international remittance services with Western Union.60
7.0 JAPAN...62
Introduction 62
Consumer finance 63
Japanese retailers are much less likely to offer point-of-sale consumer finance than payment cards 63
JACCS is the dominant partner used in this domain..63
... in which only four other competitors are apparent..64
... namely AEON Credit Service, Cedyna, Credit Saison and Orico .65
Seven categories host retail brands with arrangements for non-card consumer finance.65
Banking products 67
Overview 67
As many as 11 major retail brands in Japan make savings accounts available to their customers….67RETAILER CONSUMER FINANCE AND BANKING IN THE ASIA-PACIFIC REGION
III
Personal loans, mortgages and savings accounts 67
… with some of the same captive providers involved as for payment cards and consumer finance...67
Both Rakuten Bank and Seven Bank are substantial captive banking businesses..68
Provision of mainstream banking products is concentrated mainly in two retailer categories..70
International payments / remittances 72
Seven Bank International Money Transfer is a joint venture of Seven and I with Western Union...72
Rakuten Bank launched its own international remittance service in 2013 72
8.0 MALAYSIA75
Introduction 75
Consumer finance 75
Relatively few major retail brands have made an arrangement for non-card point-of-sale finance... ..75
... albeit AEON Credit Service works with several important partners in this arena..76
Those consumer finance schemes that exist are concentrated in three retailer categories.76
Banking products 78
Overview 78
The concept of retailer banking has not yet taken off to any significant degree in Malaysia78
Personal loans, mortgages and savings products 78
International payments / remittances 78
9.0 NEW ZEALAND81
Introduction 81
Consumer finance 81
Point-of-sale finance is quite commonly available from major retail chains in New Zealand81
… with five non-internal providers apparent in this field.82
The Warehouse Group plans an expansion of its in-house financial services capabilities with a new captive ...82
Banking products 84
10.0 PHILIPPINES..85
Introduction 85
Consumer finance 85
Handyman offers point-of-sale finance to its customers but funds this on an internal basis 85
Banking products 88
Overview 88
All activity in this sphere is focused on international remittances...88
Personal loans, mortgages and savings accounts 88
International payments / remittances 88
... with four retail brands having introduced this type of service.88
11.0 SINGAPORE...92
Introduction 92
Consumer finance 92
Two retail brands in Singapore offer point-of-sale finance with both funding this themselves .92
Banking products 95
Overview 95
The collaboration of NTUC FairPrice with OCBC extends to a savings account..95
OCBC has strengthened its ties with NTUC through a number of shared initiatives95
Personal loans, mortgages and savings accounts 96
International payments / remittances 96
12.0 SOUTH KOREA .99
Introduction 99
Consumer finance 99
Banking products 100RETAILER CONSUMER FINANCE AND BANKING IN THE ASIA-PACIFIC REGION
IV
Overview 100
Homeplus is co-operating with KISB for general-purpose personal loans..100
Personal loans, mortgages and savings accounts 100
International payments / remittances 100
13.0 THAILAND 103
Introduction 103
Consumer finance 103
Krungsri is the only provider of point-of-sale finance active among major retailers in Thailand.103
... having become a part of Mitsubishi UFJ Financial Group in 2013 ..103
Banking products 104
14.0 VIETNAM ..106
Introduction 106
Consumer finance 106
Relatively few major retail brands have set up a scheme for point-of-sale finance 106
HDFinance and PPF Vietnam are the two visible external providers in this arena.106
Banking products 110
Overview 110
Petrolimex has introduced an international remittance service with PG Bank110
Personal loans, mortgages and savings accounts 110
International payments / remittances 110
15.0 APPENDIX113
Major captives and joint ventures 113
A few captive or joint venture entities are apparent in each of the product areas in scope113

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