A significant portion of sales during this year's Singles Day shopping event in China came from spending on credit, according to estimates from analysts.
"Lending to corporations has a non-performing loan problem, so the banks across China are trying to diversify into the retail business," Nicholas Zhu, banking analyst at Moody's in Beijing, said in a phone interview.
The lack of a unified credit system in China has typically made it difficult for many people to get loans or a credit card, especially migrants working in large cities. "Overall the market data volume is increasing, so banks can improve their ability to reduce risks," said Hang Qian, principal at consulting firm Oliver Wyman's finance and risk, and public policy practice. That's according to a CNBC translation of his Mandarin-language remarks.In China, many credit cards also offer installment purchase plans.
Buying on installment is more popular among Chinese and cheaper than using a revolving line of credit, he said. He estimated that use of installment purchase plans accounted for about 60% to 70% of credit use., said that during this year's Singles Day, gross merchandise value broke 100 million yuan in half the time it took last year. GMV is a key industry metric measuring the total dollar value of merchandise sold.
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