Yuebao, the mutual fund launched by Alibaba Group for its online shoppers in mid-2013, showed Chinese users how easy it could be to purchase financial products online or through a mobile app. It generated so much buzz in China in the past year. Alibaba claims more than 100 million users had tried it out in the first year since its launch. Before long, other big Chinese Internet companies, including Baidu, Tencent, Sina and Sohu, also began selling mutual funds through their own Web/mobile services.

What’s interesting is many Chinese fintech entrepreneurs, instead of feeling afraid of those giants, say they are grateful for Yuebao for educating Chinese users. In the 12 months ending June 2014, personal finance app users in China increased 124% to 68.2 million, higher than the overall app user growth rate which is 64%, according to the latest report released by iResearch, a Chinese market research company. (report in Chinese)

The causes include, according to iResearch, (a) the total number of financial apps increased from 39 to 61 in the year; (b) early movers have been developing new features and improving user experience, and (c) increasingly more Chinese users are embracing the idea of personal financial management through mobile apps.

iResearch concludes that there are four categories of finance apps in China: (1) financial transaction aggregation and budgeting (such as Suishouji, or Feidee), (2) credit card management (such as u51, or 51Zhangdan), (3) aggregation of financial products (such as Win-win Financing, Tongbanjie and Baidu Financial Management), and (4) apps offering all of the above (such as Wacai). 

The six apps mentioned above account for 60% of the market in term of usage, according to the iResearch report. And all of them have received tens of millions of dollars funding from top venture capital firms such as Sequoia China, IDG Ventures and GGV.

Like what have been happening in other tech sectors in China, it is estimated that powerful apps of the first three categories will eventually grow to become of the fourth, or even more.

Wacai, launched in 2009, has had more than 80 million users, Quan Yunfeng, co-founder of the company, disclosed at a TechNode event earlier this month. Starting off as an aggregator of financial transactions, the app began selling mutual funds in mid-2013. The company is testing more, credit card repayments, small loans, insurance products, and the like.

Of course, new apps targeting niche markets or user groups, or whose developers think they have better ideas, will continue to emerge. Qiandaren is an app that recommends combinations of stocks listed on local markets. Their target audience are young Chinese users who even don’t understand stock markets or what they own. More options such as futures will be added, according to Qiandaren team.