Daily Tech Snippet: Monday, August 29

• China’s Murky World Where E-Commerce Meets Student Lending: Across college campuses in China, a small army of marketers is recruiting students to borrow money at interest rates many times that charged by the nation’s banks. Those without a credit history or parental approval can borrow money to buy a smartphone, pay for holidays, or get the latest sneakers through a raft of apps such as Fenqile. The market leader, whose name literally means Happy Installment Payments, has 50,000 part-time marketers across more than 3,000 universities and proudly touts the slogan “Wait no more; love what I love.” Welcome to the regulatory gray area where peer-to-peer lending meets e-commerce in China. In the last three years, tens of millions of students have taken out micro-loans with the tap of a button to buy things. Once just the realm of startups, the sector has attracted heavy hitters in China’s online industry, including Alibaba Group Holding Ltd.’s finance affiliate and JD.com Inc., which are pouring hundreds of millions of dollars into the lending model. In a nation with 37 million college students, the market is expected to reach $15 billion, according to the Beijing-based market research firm Analysys. The apps sell everything from cameras to concert tickets sourced from third-parties, charging students annualized interest rates typically above 10 percent. The loans are then packaged and sold to wealthy individuals, who find the expected return of as much as 10 percent much more attractive than the central bank’s benchmark savings rate of 1.75 percent.

• How long before Amazon forces its Indian rivals into a merger or sale? Three years into Amazon’s aggressive push in India, the country’s two home-grown e-commerce competitors are feeling the pressure. Both Flipkart and Snapdeal have raised more than a billion dollars, but have historically recorded big losses as they’ve engaged in discounting battles with each other and with Amazon. Amazon has made it clear it is willing to spend big to become the No. 1 e-commerce player in the country after failing to make a dent in another huge international market, China. Now, it seems like every week there’s a new rumor of the two homegrown players considering a merger or sale. Alibaba, which owns a stake in Snapdeal and another Indian player, Paytm, is often in the conversation. In any potential talks, however, Flipkart and Snapdeal’s frothy valuations could be a problem. Flipkart was valued last year at $15 billion while Snapdeal most recently secured a $6.5 billion valuation.