LexinFintech's Strategy: Leveraging E-commerce for Customer Acquisition and Risk Management Upgrades
2023-07-30
LexinFintech Holdings Ltd., a leading online consumer finance platform in China, recently held its earnings call meeting to discuss the company's operations and strategic initiatives. The meeting focused on the growth of LexinFintech's e-commerce sector, the role of its offline sales team, and the progress of its second empowerment SaaS business. The management team highlighted the opportunities for customer acquisition and retention, as well as the benefits of partnerships with banking and funding partners. The meeting aimed to emphasize the company's unique system and differentiation strategies.
One of the key topics discussed during the meeting was LexinFintech's strategy to leverage its e-commerce sector for customer acquisition and retention. The company recognizes the rapid growth of the e-commerce industry and sees it as a significant opportunity for increased spending. In the current macroeconomic environment, where there are higher requirements for loan repayment ability, LexinFintech believes that focusing on e-commerce can help attract and retain customers for their main business of loan facilitation.
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The company also emphasized the importance of its offline sales team in customer acquisition and risk evaluation. They believe that the offline sales team is particularly advantageous when online traffic is more expensive and harder to come by. By accurately evaluating customers and understanding their willingness, LexinFintech can better retain existing customers and acquire better ones. The company plans to invest more in the offline sales team to differentiate itself in customer acquisition.
Furthermore, LexinFintech mentioned its second empowerment SaaS (Software-as-a-Service) business, which is a monetization of its past experience. The company has already partnered with banking and funding partners for this venture.
In terms of the company's risk management system, LexinFintech highlighted its focus on upgrading the system. They discussed the importance of accurately assessing customer credit profiles and mentioned key initiatives such as refining customer segments, increasing user identification capabilities, and upgrading the model matrix for different customer segments. These initiatives are crucial for increasing the proportion of prime customers and generating sustainable long-term returns for shareholders.
The company's outlook for the quarter and year is generally positive, with an 8% increase in February and a 2% increase in March. However, there was a minor decrease in May due to a slowdown in demand after the spike caused by COVID-19. The management team expects a slowdown in demand entering the second quarter, but it is still in line with their expectations. The company's overall risk level is expected to improve in the future, with ongoing optimization in terms of risk management. LexinFintech aims to achieve a balance between risk-taking and profitability, and if risks improve, they may consider taking more risks to increase profitability.
During the meeting, LexinFintech also provided updates on its strategic initiatives related to risk management. The company has upgraded its risk management system, focused on risk-driven operations, and improved the efficiency of risk management. They have also invested in the coverage of credit data and strengthened the utilization of credit data. The company believes that they will make further breakthroughs in their user identification capabilities in the remainder of 2023. Overall, LexinFintech is committed to upgrading its core risk management capability and strengthening its refined risk management system.
In conclusion, LexinFintech's earnings call meeting highlighted the company's focus on leveraging the e-commerce sector for customer acquisition and retention, investing in the offline sales team for better customer evaluation, and exploring opportunities in the SaaS business to monetize its past experience. The company's strategic initiatives related to risk management were also discussed, emphasizing the importance of accurately assessing customer credit profiles and upgrading the risk management system. With a positive market outlook and ongoing optimization efforts, LexinFintech aims to generate sustainable long-term returns for its shareholders.