Quantitative traders' new online lending tactic: installment shopping malls

How can the capital map of AI Installment Mall hide regulatory risks?

Text | Xiao Luyu

Editor | Yang Xuran

The annual 315 Consumer Rights Day has just concluded, but regulatory authorities’ combined efforts against the online lending industry clearly have not ended.

The interview on March 13 was the first focused discussion with assistive lending platforms since the new regulations took effect in October 2025. The targeted platforms included five well-known industry players such as Fenqile, marking a shift of regulatory focus from licensed financial institutions to the entire internet assistive lending chain.

On March 15, the State Financial Supervision and Administration Bureau and the People’s Bank of China jointly issued the “Regulations on Clear Disclosure of Total Financing Costs for Personal Loan Business,” aiming to fundamentally address the persistent issue of “invisible fees” in online lending. This regulation is equally milestone-worthy as the new assistive lending rules.

The core requirement of the new regulation is that lending institutions must provide borrowers with a clear statement of the total financing costs for personal loans, listing all fee items individually—including interest, installment fees, credit enhancement service fees, and even late payment penalties or contingent costs.

This series of regulatory actions will make it difficult for the previously loose online lending industry, which relied on information asymmetry and high hidden charges for profit—though the reality may not be as smooth as it appears.

At least, the rise and expansion of Installment Mall seem to mark the beginning of a new cat-and-mouse game.

This article is a deep-value analysis from the “JuChao WAVE” content team. Follow us on multiple platforms for more insights.

01 Operating Model

If you’ve seen ads on your phone like “0 yuan order, enjoy now, pay later” or “Fast shopping, flexible turnover,” please don’t rush to click. Behind these glamorous marketing phrases, there may be a carefully designed debt trap—Installment Mall.

As the name suggests, Installment Mall is a product of deep integration between retail e-commerce and consumer finance. Users can browse products on the platform just like an e-commerce site and choose installment payments to “enjoy now, pay later.” In a sense, platforms like JD Baitiao and Ant Huabei can be considered types of Installment Mall.

This is a normal business model in the era of consumption upgrading, allowing consumers to enjoy desired products in advance. But behind the scenes, Installment Mall can operate in a darker way, with a tightly woven套路.

Step 1: High-priced sales with astonishing markups. On these platforms, the best-selling items are always high-liquidity goods like smartphones, gold, and luxury liquor because they are easiest to resell, yet their prices are outrageously high.

For example, on Luyou Selection, some consumers reported that after activating “Enjoy now, pay later,” the price of an iPhone 17 originally listed at 6,467 yuan suddenly soared to 8,252 yuan, while the official Apple price is only 5,999 yuan—a difference of 2,253 yuan.

More covertly, these platforms often force the sale of inferior products. One consumer buying an iPhone 16 Pro on Yangxiaomei, a platform under Quantify, was forced to bundle a little-known Bluetooth headset, with a set price of 11,519 yuan, while the same phone alone costs only 6,899 yuan.

This “bundled sale” of low-value items with high markups is essentially a forced “cut-head interest”—a disguised form of usury.

Step 2: Recycle and realize, solidifying debt. The more sophisticated part of the Installment Mall scam is in the recycling process. The platform claims “no cash-out support,” but after placing an order, a so-called “platform partner” intermediary will contact you, asking if you need “discounted buyback.”

They will instruct the “consumer” to send the product directly to a designated address, and in return, they can get cash at 60-70% of the product’s value without physically handling the item. This discounted buyback is actually a form of online loan disbursement.

After this process, the user’s overall financing costs often far exceed expectations. For example, on another platform, Xiaoxiang Youpin, a consumer bought 4,707 yuan worth of gold and only received 3,016.5 yuan after “one-click buyback,” yet still had to repay the principal of 4,707 yuan in installments.

Searching for Yangxiaomei e-commerce shows numerous buyback listings.

Calculating with IRR standards, this “installment shopping” has an annualized borrowing rate of up to 146.8%, far exceeding the 24% red line.

After the implementation of the new regulation on the 9th, traditional “interest and fee splitting” models are strictly regulated, and products with annualized rates above 24% are being phased out. But the market’s demand for high-interest funds has not disappeared.

Therefore, institutions transitioning from P2P, small loan companies, and factoring firms have entered the Installment Mall industry, hiding interest within product markups, turning illegal “cut-head interest” into seemingly legitimate product sales.

By now, many should understand that these Installment Malls are not primarily for “shopping” but are designed to facilitate borrowing processes.

They use the “shopping” facade to completely conceal the lending nature, transforming interest rates far above legal limits into what appears to be voluntary customer payments for goods, and neatly reporting this in their financial statements.

02 Who Is Paying the Bill

Who participates in this carefully crafted debt game of Installment Mall? Who is footing the enormous profits for the platform?

To answer this, we need to split the user base into two groups. These two types of users play very different roles in the business logic of Installment Mall.

The first group consists of ordinary consumers attracted by ads like “0 yuan order” and “enjoy now, pay later,” genuinely wanting to buy something on the platform. They may be interested in a new phone or a piece of gold jewelry, and are lured by the platform’s installment options and new customer benefits to register and place orders.

Because the platform’s prices are far above market value, sometimes even fake or inferior products, these genuine consumers unknowingly pay a high “IQ tax.” The proportion of complaints and refund requests is also high.

But from the platform’s perspective, this group has special value—they are the ones who put a legitimate e-commerce shell around the Installment Mall, making it easier to explain the e-commerce revenue in financial reports.

The second group, however, is the platform’s real “profit cow.” They are frequent users, not interested in the products but in the platform’s credit limits. The discounted buyback is essentially a high-interest loan scheme, and many of these users are fully aware.

Why do these “consumers” knowingly do this? The answer is harsh: because the second group often cannot get loans through formal channels.

In finance, such people are called “co-debtors” or “multiple borrowers.” Their credit records are often full of overdue payments, collections, or bad debts, and many banks, licensed consumer finance companies, and mainstream online lenders have already rejected them.

Installment malls that accept all comers naturally become their lifeline—but even scarier is what happens when these users become “repeat customers.”

High borrowing rates and restrictions on early repayment can cause borrowers to keep making payments without ever fully repaying the principal.

For an ordinary consumer, they might only buy a phone once every few years, earning a few hundred yuan profit. But for a debt-trapped co-debtor, they might repeatedly borrow dozens or hundreds of times on Installment Mall, accumulating profits that are dozens or even hundreds of times more than an ordinary consumer.

This is the “LTV” (lifetime value) that fintech industry loves to talk about—the total profit a customer contributes over their entire lifecycle. From this perspective, many platforms hope “repeat customers” keep borrowing anew, always contributing to the platform.

Some platforms even intentionally or unintentionally keep second-type users in this cycle of borrowing and repaying. Their risk control models are not designed to screen for those with repayment ability but to identify “high-quality” repeat borrowers. As long as they can keep harvesting from these users, platforms are willing to keep granting new credit lines.

This explains why the profit model of Installment Mall is so controversial.

03 Who Is Backing Them

Despite numerous violations, the rapid rise of Installment Mall in an era of strict regulation suggests deeper reasons behind their success.

The answer is not complicated: the capital map behind these Installment Malls is far more complex than it appears. The consumer-facing app is just the front exposed to the public; the hidden middle layer involves installment tools or guarantee companies, and the back end conceals small loan licenses or partnerships with licensed financial institutions.

This multi-layered structure allows them to maneuver under regulatory scrutiny. Each layer provides a veneer of compliance and segments the profits from “repeat customers.”

For example, Yuan Shiyun (Beijing) Technology Group Co., Ltd., the operator of Xiaoxiang Youpin, indirectly holds a 2.53% stake in Jin Cheng Consumer Finance through its wholly owned Chongqing Hongguang Information Technology Co., Ltd.

This means Xiaoxiang Youpin is both a platform operator and an indirect shareholder in consumer finance. Until February 2026, Yuan Shiyun transferred this stake to Zhongshi Hengtong Technology to raise funds—but the business model was already set.

In the Xiaoxiang Youpin app, Fenghe Xiaodai (wholly owned by Hongguang Information) still provides loans. On the Black Cat Complaint platform, over 32,000 complaints mention Xiaoxiang Youpin, with many customers unknowingly being charged “membership fees” monthly.

Tao Duoduo is backed by two financing guarantee companies (Beijing Baoyue Financing Guarantee Co., Ltd. and Hainan Xinhui Financing Guarantee Co., Ltd.), which have also appeared in the loan cooperation lists of Jin Cheng Bank, Zhongbang Bank, CITIC Consumer Finance, and others.

The involvement of guarantee companies allows the Installment Mall to legally charge high “guarantee fees,” effectively raising the overall interest rate. For example, Tao Duoduo’s deductions are made by Baoyue Rongdai and Xinhui Rongdai, acting as the deduction entities, forming a complete利益链.

Unsurprisingly, complaints about Tao Duoduo often cite high prices, excessive interest, and high guarantee fees.

QuantifyPai, which has successfully listed in Hong Kong with a market cap of over 10 billion yuan, also appears entangled with online lending and Installment Mall operations, making it one of the most influential players in this field.

QuantifyPai’s stock performance (since listing)

Founded in 2014 with its cash loan platform “Credit Wallet,” QuantifyPai was forced to pivot after the P2P industry crackdown, upgrading Credit Wallet into a quasi-e-commerce platform called Yangxiaomei. The prospectus showed that Yangxiaomei’s revenue accounted for over 90% of the group’s total.

Why was Yangxiaomei’s transition so smooth? Likely related to the indirect control of the assistive lending company “Yingtan Guangda” by founder Zhou Hao. In July 2024, they signed a framework agreement for Guangda to provide credit payment services to users purchasing goods via Yangxiaomei, lasting until the end of this year.

From these cases, it’s clear that Installment Mall is not just a simple sales platform but a new shell used by veteran assistive lenders to prolong their business life.

A regulatory insider told media that there are at least over a thousand similar “mall” platforms nationwide, with individual platforms reaching monthly transaction volumes of 200-300 million yuan, totaling around 600 billion yuan annually. With such a vast industry scale and intertwined interests, regulatory challenges are immense.

If a billion-dollar listed company like QuantifyPai is involved in similar operations, we can only imagine how many “consumers” are already deeply entangled in this new online lending trap.

Author’s note: Personal opinions are for reference only.