Haas Goes to China; Experiences a Fusion of Culture and Technology

Written by Nausher Cholavaram, Rohan Balwani, Tanya Gupta, Pradeep Khanal, and Edi Lim

Team Yirendai after Final Presentation

Team Yirendai after Final Presentation

We just returned from China after completing a two-week stint with Yirendai, a FinTech company based in Beijing. Our time was filled with experiences that enriched us professionally, personally, and culturally. We learned about the booming economy in China and the uncertainty that comes with it. We also talked to company leads and learned how they think about company strategy. The two weeks were also great exposure to Chinese culture both at and outside of work. We tried different types of Chinese food, watched traditional Chinese opera, and participated in some heavy bargaining when shopping.

Client and project overview

Yirendai, our client, is a leading FinTech company in China. It is a dominant player in the Chinese peer-to-peer (P2P) lending industry and has recently expanded into the Online Wealth Management space. Having made a huge impact in China, Yirendai is now setting their sights on the US!  Yirendai enlisted our help to explore options for their expansion into the US market.

This ask posed a very interesting challenge for us. On one hand, China is far ahead in the world of FinTech with their ubiquitous use of technology for making payments and conducting business via mobile phones. For example, we saw panhandlers and street musicians display QR codes for WePay to facilitate donations, and we ate at a food court where no cash or credit cards were accepted. On the other hand, we learned that Chinese investors don’t possess the same level of sophisticated planning and diversification that investors in other markets do. When we synthesized all of our learnings and presented our final presentation to Yirendai, they had very incisive questions and couldn’t help themselves but become excited by the ideas we presented.

Project Details

Team Yirendai in IBD Class at Haas

Team Yirendai in IBD Class at Haas

We started the research for our project while in the US. We spent 3 weeks researching P2P Lending and Wealth Management industries in general and our client’s business in particular. We read hundreds of documents about both industries, downloaded P2P lending apps to learn their features and user experience, conducted surveys, and interviewed contacts about their investing behaviors. We had insightful exchanges with our clients where we validated our understanding from field studies with their expert knowledge. The work was intense but totally worth it.

As we arrived in China, we prepared our recommendation. We surveyed the problem-solving toolkit – financial modeling, SWOT, business model canvas, and go-to-market strategy framework – we learned at Haas and implemented them to build our recommendation. We had several discussions about customer segmentation, product differentiation, and customer acquisition strategy with our client’s CFO, Head of Online Wealth Management, Director of Investor Relations, and Head of Product Management. Their invaluable input helped mold our recommendation.

Cultural Immersion

Though China has been lauded for its recent economic advancement, it has a long history of rich culture and tradition. Besides our client, Yirendai, our team was very excited about the Great Wall. We went to the Jinshanling section, which was very scenic and less crowded. Walking 6 hours on the Great Wall didn’t feel enough. We were astonished by its grandeur and humbled by its expanse. Our day at the Great Wall was definitely one of the finest experiences of our stay in China.

Team Yirendai at the Great Wall of China

Team Yirendai at the Great Wall of China

Beijing is full of other historical and cultural sites as well. We visited the Forbidden City, a historical palace museum in Beijing. We toured the Tiananmen Square and other important sites in Beijing including the Temple of Heaven, the Summer Palace, and the Lama Temple. We went to the popular Antique market and also playfully immersed ourselves in a  bit of haggling at Beijing’s popular Pearl and Silk markets.

It was a little disheartening to see sun only twice due to poor air quality during our 2-week stay in Beijing, but we remain hopeful the measures being implemented currently will continue to make improvements.

Following our final presentation, our client treated us to a traditional Beijing style dinner along with Beijing Opera – quite a fitting end to our 2 weeks stay in Beijing.

Team Yirendai at the Beijing Opera

Team Yirendai at the Beijing Opera

The China trip was incredible and the IBD experience, priceless. It was like opening the wardrobe and venturing into a new world, both professionally and culturally, with talented fellow Haasies! Our relationship with the client did not end with the conclusion of the project. We are still in touch through WeChat and plan to meet our client on their next visit to the US for a roadshow in the second half of 2018.

 

Updates from IBD China – Team CreditEase

Berkeley-Haas Evening & Weekend MBA students Jason Eaves, William Huang, Arthur Ng, and Harish Srinivasan participated in a summer IBD project in Beijing, China with CreditEase’s P2P Online Lending platform Yirendai.

First week in country

The team received a warm welcome from the clients during our first day visit at the Yirendai office. We presented the day of arrival presenation to the Yirendai CFO (Dennis Cong, Berkeley-Haas EWMBA Alumnus) and the senior management team. Our client had also arranged meetings for us with other CreditEase departments on Tuesday, which included Wealth Management, Personal Loans and Risk Management. To fully understand the internet finance industry in China, we performed personal interviews with our clients, industry experts and end-users. Our team members were able to obtain several good insights which helped us identify opportunites for Yirendai to further improve their marketing, operations, product development and business development functions.

First day of arrival lunch with clients at the Yirendai office (Chaoyang District, Beijing)

First day of arrival lunch with clients at the Yirendai office (Chaoyang District, Beijing)

LendIt Group Dinner with CEO of CreditEase Mr. Ning Tang (Restaurant 1949, Beijing)

LendIt Group Dinner with CEO of CreditEase Mr. Ning Tang (Restaurant 1949, Beijing)

Mobile Finance and Online P2P Lending in China

We were very fortunate to be physically in Beijing to attend the 2015 China Mobile Finance Conference/LendIt China with our clients during the first week of our in-country work. With a growing mobile user base, China has elevated the use of mobile services and online P2P platforms to include services such as mobile payments, Internet finance, transportation, home renovation, and lodging.

The LendIt conference featured several guest speakers and panelists including executives from leading Chinese mobile and P2P lending companies, representatives from P2P regulatory associations, and executives from U.S. P2P lending companies/ including Ron Suber from Prosper and Jeremy Todd from Orchard Capital. All speakers offered their key insights on the growing Chinese P2P market and the steps that need to be taken in order to continue the momentum. After the conference day, our client invited us to an intimate dinner with their leadership team and the US executives where we had the opportunity to network and learn more about global P2P trends directly from the top experts in the field.

2015 Mobile Finance International Summit/LendIt China (National Conventional Center, Beijing)

2015 Mobile Finance International Summit/LendIt China (National Conventional Center, Beijing)

Taste of China

With such a large population and so much cultural diversity, Beijing had not only the traditional northern cuisines, but also a good variety of regional foods from all over China.

Peking Duck- the signature dish of Beijing

Peking Duck- the signature dish of Beijing

We are very fortunate to have worked with Kelly Zheng (Corporate Strategist for CreditEase), who kindly took us to several specialty restaurants for dinner, even after a long day of work. The cultural experience of Chinese dining certainly surprised us and some of the foods were also quite challenging to eat.

Team dinners with our client (Kelly Zheng) at traditional Beijing style restaurants

Team dinners with our client (Kelly Zheng) at traditional Beijing style restaurants

Culture, History, and Art of China

As China has emerged to become a major economic power – with annual double digit growth rates – it is easy to overlook its heritage in light of the modernization happening throughout the country. While there are countless office buildings and skyscrapers under construction in the city center, China’s rich culture has remained at the foundation of its rapid forward progress. While in-country we took some time to visit historical sites and experience the performing arts.

Chinese “Face Change” performance originated from the Szechuan province

Chinese “Face Change” performance originated from the Szechuan province

The Great Wall of China, just outside of Beijing

The Great Wall of China, just outside of Beijing

Summer Palace of the Qing Dynasty Emperor located in Beijing

Summer Palace of the Qing Dynasty Emperor located in Beijing

Final Thoughts

Despite only two weeks of in-country work, our team was deeply immersed in the local business culture, food, and way of life. We observed that Chinese financial technology firms can have ambitious goals while having fun at the same time. During the process of coming up with recommendations, we leveraged the strengths of each team member and used the frameworks we learned at Haas. In our final presentation, we introduced our Berkeley-Haas innovation process to Yirendai’s executive management team and got positive feedback on our strategic recommendations related to brand awareness, net promoter score, partnerships, innovation process, and data strategy.

Berkeley-Haas IBD China Team presented CAL gear to the Yirendai management team

Berkeley-Haas IBD China Team presented CAL gear to the Yirendai management team