China is a densely populated country. It is a favourable condition for small businesses to find more potential investors because of wider internet reach. China as a country has many advantages as for as crowdfunding is concerned. Firstly, it has a high number of internet users, therefore giving businesses a larger audience. Secondly, it has a larger private capital, therefore making more people capable of investing.
Keeping above two things in view, Crowdfunding in China isn`t as developed as it should have been. In fact, Crowdfunding in China is in its early stage. In spite of having preferable crowdfunding marketing conditions, Crowdfunding in China failed to make any landmark history in crowdfunding industry so far. Although people are available, money is available but what remains missing is the lack of proper investment channels. It has a potential to offer good investment opportunities for Chinese investors, provided it`s regulated in proper and easy to use form.
In China, more people go for businesses or start-ups. Therefore, it can be imagined how much requirement of investors is in China. So the market for crowdfunding is very demanding and so should be made easier to use to generate investments for establishing businesses.
Crowdfunding in China is a potential platform for investors in China to invest through and for businesses Crowdfunding in China is an efficient option for them to go for fundraising through crowdfunding. It`s comfortable to go for crowdfunding in order to raise funds as it runs via the internet, thereby making larger contributions possible.
Crowdfunding in China as though is slow but definitely it`s growing and the kind of open platform crowdfunding offers, with information about businesses available at finger tips and transparency in it`s working, makes Crowdfunding in China bound to grow. As more people get to know about it and as dealings with it are made easier, Crowdfunding in China can take over as a powerful alternative for businesses to turn to and solve their financial problems. As for people, crowdfunding offers them the best platform where they can invest rather than going for conventional savings route.
Many Barriers that Prevent Crowdfunding Growth in China
- While China offers most favourable conditions for Crowdfunding in China to grow beyond anticipation as far as financial aspect is concerned, but there remain certain policy and regulatory challenges from the official side which acts as barriers for Crowdfunding in China to grow.
For example, there are certain provisions which make equity-based crowdfunding a distant dream for most investors.
- Lack of proper platform is another barrier in the path of Crowdfunding in China. It`s reported that most of the reward-based crowdfunding platform don`t charge crowdfunders a fee.
For example: when crowdfunding sites go profitless for not charging any fee, they turn into something else (maybe a pre-selling platform for products) in order to generate profit, as such common people who may have wanted to invest though Crowdfunding in China get confused as to what this crowdfunding site is offering.
- Crowdfunding in China has another challenge that of trust. Due to poor regulations there have been cases of false information on crowdfunding sites, as a result, potential investors show low or no trust toward companies they want to invest in.
For example: in case something unseemly happened with money investors invested through Crowdfunding in China, authorities make no intervention and as such potential investors find it too much risky to make an investment at their own risk.
