The nature of crowdfunding in China: initial evidence

Abstract

Purpose The purpose of this paper is to develop initial evidence about the nature and features of crowdfunding in China, given it is largely unregulated regulatory frameworks. Design/methodology/approach The paper used extensive desk research using data collected from the public and private sectors, after which the data was analyzed parallel to existing academic literature, that is, institutional context by Bruton et al. (2014). This paper uncovered patterns of development, profiling crowdfunding platforms, examining the regulatory landscape and providing antecedents of successful crowdfunding projects in China. Findings When the traditional financial markets are hard to reach, micro, small and medium enterprises (MSMEs) were starved for capital. Crowdfunding can play a major role in funding and risk sharing. It is an innovative and dynamic vehicle for MSMEs as well as enthusiastic investors in China. Since its initial introduction to China in 2009, crowdfunding has gained substantial popularity in a relatively short period. Currently, there is still not an identifiable guideline on how to delineate the significance of the crowdfunding platform. The development of crowdfunding in China faces a few unresolved key issues. As researchers exploring this phenomenon in new ways, crowdfunding platforms can be enhanced in a manner that benefits the capital seeker, investors and society as a whole. Originality/value There is a dearth of information on start-up crowdfunding in Asia. With little data available to analyze, so this paper hopes to contribute to knowledge and provide valuable information to researchers and industry representations. Crowdfunding represents a potentially disruptive change in the way that new ventures are funded. This paper represents an initial analysis in the study of new ventures in China. Finally, the authors provide recommendations for entrepreneurs, investors and policymakers as well as researchers and practitioners with suggestions about yet unexplored avenues of research.

The Future of Crowdfunding Research and Practice

“…Tencent, WeChat, Weibo), as well as e-commerce websites (e.g. JD, Alibaba), which also serve payment processing functionalities (Huang et al 2018). Elsewhere, Facebook has entered the donation crowdfunding market, by enabling users to launch money collections for causes they are passionate about (Campbell 2018).…”

Crowdfunding in China: Turmoil of Global Leadership

“…The performance of the key players (e.g. Taobao Crowdfunding, JD Crowdfunding) counts for most of the market share in China (Huang et al 2018). As a latecomer of the crowdfunding market, the legal framework related to the regulation of the Chinese crowdfunding market is immature which hinders its further development (Yuan and Chen 2018).…”

“…As a latecomer of the crowdfunding market, the legal framework related to the regulation of the Chinese crowdfunding market is immature which hinders its further development (Yuan and Chen 2018). Specifically, this immature legal framework has brought problems such as fraud, illegal fundraising, and money laundering (Huang et al 2018). As a result, the growth rate of the Chinese crowdfunding market has been slowed down as legal frameworks are being revisited (Chirisa and Mukarwi 2018).…”

Bagaimana Crowdfunding Dapat Menyelesaikan Permasalahan Sosial Yang Terjadi di Masyarakat

“…Crowdfunding muncul berdasarkan permasalahan social yang mengakibatkan masyarakat membentuk suatu usaha social untuk menyelesaikan permasalahan social tersebut. Crowdfunding sendiri dapat dikaitkan dengan penggalangan dana secara sedikit-demi sedikit dari beberapa individu atau institusi melalui platform online (Huang, Chiu, Mo, & Marjerison, 2018).…”

“…Walaupun sepertinya crowdfunding merupakan program yang menjanjikan untuk memecahkan suatu problematika di masyarakat namun kemungkinan keberhasilan crowdfunding tidak mencapai 50%, hal ini dikarenakan semua individu dapat menjadi pelaku crowdfunding sehingga kebanyakan orang perlu mengetahui latar belakang program tersebut (Rodriguez-Ricardo, Sicilia, & Lopez, 2018) . Namun di beberapa Negara, Crowdfunding masih berada pada tahap awal dibandingkan dengan pasar lainnya yang telah lebih dulu 'matang', seperti yang terjadi di China, para peneliti di China masih perlu meneliti apa saja yang dapat dilakukan oleh crowdfunding agar dapat memberikan manfaat kepada penemu, penggerak crowdfunding, masyarakat bahkan Negara dalam sebuah kesatuan [Huang, Chiu, Mo, Marjerison, 2018].…”