📊 2013 China Fund Market Status

Steady growth in public fund count; equity funds dominated. By end of 2013, the number of public funds reached 1,552, among which open-end funds stood at 1,415 (91.2% of total). Equity funds held the largest share, but bond and money market funds are expected to rise due to risk sensitivity.

In 2013, total public fund shares reached 3,117.98 billion units, while net asset value (NAV) reached 3.002 trillion yuan, a y-o-y increase of 4.7% supported by partial market rallies.

🏛️ Policy & Economic Environment (PEST)

Regulatory Updates

In 2013, key regulations were issued: "Interim Rules on Fund Sales via Third-party E‑commerce Platforms", "Interim Rules on Insurance Institutions Selling Funds", and "Administrative Rules on Open-end Fund Sales Fees". These clarified third-party platform functions and eligibility. Earlier technical guidelines (2007/2009) laid the groundwork.

Wealth & Digital Economy

In 2013, personal household deposits and cash assets totaled ¥51.7 trillion, growing ~14% annually. Stock/bond/fund investment assets reached ¥26.9 trillion. Meanwhile, China's internet economy reached ¥600.64 billion, up 50.9% YoY, creating fertile ground for fund e‑commerce.

📱 Fund E‑Commerce Penetration Steadily Rising

In 2013, the overall e‑commerce penetration for fund sales reached 46.5%. iResearch forecasts it will climb to 64.7% by 2017. Banks' electronic replacement rate is still expandable; third-party distributors and e‑commerce platforms will further boost digital sales. On the direct sales front, Yu'E Bao ignited the balance-wealth management model, though replication by other fund houses remains challenging in the short term.

🏢 Direct Sales E‑Commerce: Retail at 69.7%

In 2013, institutional direct sales reached ¥1,090.9 billion, among which only ¥21.1 billion was done via e‑commerce (1.9% penetration). For retail direct sales, total reached ¥730.6 billion, and e‑commerce direct sales amounted to ¥509.4 billion, representing a high 69.7% penetration. Even excluding Yu'E Bao effects, retail e‑commerce penetration stood at 26.4%.

Institutional investors rely on offline roadshows, while retail clients embrace digital convenience thanks to third-party payment and e‑commerce platforms.

🔗 Value Chain & Core Participants

Fund distribution institutions: commercial banks, securities firms, independent fund distributors (five major categories) – commercial banks lead in AUM.
Third-party e‑commerce platforms: As of 2013, only Taobao.com was approved by CSRC, with more expected to join in the future.
Payment & settlement institutions: 12 licensed fund payment providers (e.g., Alipay, Tenpay, Allinpay) enabling the balance-wealth disruption.

Key players overview:

⚡ Yu'E Bao Model: Money Fund Explosion

Traditional funds require professional advice and higher entry barriers. The "balance-wealth" concept (e.g., Yu'E Bao) lowered the threshold drastically. After the June 2013 launch, the share of money market funds jumped to 22.7% by end-2013, a 33% increase from early 2013. Bond fund share dropped by 14.6%, while equity/mixed funds saw relative declines.

📱 Key Balance-Wealth Products (as of April 2014)

Products such as Yu'E Bao, Licaitong, Lingqianbao, Baizhuan, and Zhanggui Wallet partnered with money market funds, with purchase/redemption rules varying; highest 7-day annualized yields reached up to 7.9%.

🚀 Trends: De-fundification · User-Centricity · Wider E‑commerce Scope

De-fundification: Money funds transformed into "balance-wealth" products, shortening the distance with end investors.
User-first paradigm: Financial products prioritize user demands, balancing security and convenience.
Deeper collaboration: Fund companies and internet giants co-develop new business models, boosting ecosystem diversity.

Enlarged E‑Commerce Connotation

Beyond external sales, fund e‑commerce evolves into an integrated internal/external information platform. Focus areas: compatibility (unified IT governance), security (core data protection, role-based access), KPI planning (exposure→conversion→order rate), and open interfaces to partners to improve data collaboration.

📖 Appendix: Key Definitions & Methodology

Core Definitions

• Fund E‑Commerce (narrow sense): Fund subscription, redemption, marketing, and services via internet/electronic tools.
• Broad sense: All electronic business activities including internal processes, partner data exchange.
• E‑commerce penetration: Ratio of fund sales transacted via electronic channels during a given period.
• Trailer commission (custodian service fee): Fees paid by fund companies to distributors, deducted from management fees.
• Fund consignment vs. Direct sales: Consignment through financial institutions (banks, brokers); direct sales via fund company websites without third-party branches.

Research Methodology & Data Sources

iResearch iUserTracker (40M+ netizen panellists), combined with CSRC & AMAC public data, expert interviews, corporate financial reports, and iResearch statistical model. Data tracking began July 2006, covering 300+ website categories and 1,000+ software products.

📌 Supplementary: 2013 Open‑end Fund Transaction Scale

iResearch analysis indicates that the e‑commerce penetration of open‑end funds in 2013 reached 46.5%, driven by money market products and the balance-wealth trend. Bank consignment remains dominant, but the swift rise of e‑commerce platforms and direct retail digital access is reshaping the landscape.