Empowerment of Grassroots Consumers: A Revelatory Case of a Chinese FinTech Innovation

Abstract

Recent year have witnessed the emergence of Financial Technology (FinTech) innovations as a promising resolution to financial exclusion, via mechanisms that empower the financially underprivileged to gain access rights into the traditional financial industry. However, academic research has provided little guidance on how to strategize the IT-enabled empowerment mechanisms for FinTech innovations to realize both business success and financial inclusion. In this study, we conduct an in-depth revelatory case study on a novel Chinese FinTech innovation, Yu’E Bao, the bellwether in revolutionizing the country’s financial industry dramatically through the successful empowerment of a large population of financially underprivileged (i.e., “grassroots consumers”, translated from “cao gen” in Chinese). Through our systematic qualitative analyses of news articles collected since the product launch, we derive a two-stage theoretical model, examined through the lens of “empowerment”, and unravel the mechanisms underlying FinTech innovation’s empowerment process on grassroots consumers. Most importantly, we elucidate a “duality of empowerment”, that is, the catalyst for Yu’E Bao’s success soon becomes the impediment to Yu’E Bao’s further development. Our study contributes to the literature on Information Technology-enabled (IT-enabled) empowerment, empowerment, and FinTech. Critical implications to various stakeholders, such as government and policy makers, as well as FinTech practitioners and product designers are also drawn.

Keywords: Qualitative method, IT-enabled empowerment, grassroots consumers, FinTech, emerging market