A man uses his smartphone to scan a Alipay two-dimensional code for payments at the first unmanned supermarket in Hangzhou, Zhejiang province. Online payment and investment have become more and more popular among Chinese people. [Asianewsphoto by Long Wei]

P2P platforms are proving popular but they face strong competition from other Web products

Online investing has been hailed as the next big financial trend. It might well be.

Money market funds and peer-to-peer lending, which help small businesses expand or set-up new ventures, have become popular. Many see it as an alternative to a savings account in a brick-and-mortar bank or investing in stocks.

"We witnessed a rapid increase in online wealth management products last year. This has made the process of wealth management easier and more transparent," Wang Tao, an analyst with China Internet Network Information Center, said.

Making your hard-earned cash work for you has helped these Internet wealth management platforms flourish. Ordinary investors can put as little as 10 yuan ($1.6) or as much as 1 million yuan into money market funds, which specialize in bonds and one-year fixed bank deposits.

The average annual return on 2,000 yuan ($321) is around 90 yuan, depending on the interest rate. If you put the same amount into an ordinary savings account with a traditional bank, you would receive just 65 yuan.

"I moved to online investment platforms late in the day, so I understand the yield is not as high as it was before," Yan Tao, a human resources manager at a multinational consumer goods company in Shanghai, said. "But it is quite easy to handle and still provides a higher margin than an ordinary bank deposit account. Also, it's important to vary your portfolio."

Money market funds have become extremely popular online, especially on the Yuebao e-commerce platform, which is part of the Chinese Internet giant Alibaba Group Holding Ltd. Another leading e-commerce player, JD.com Inc, also specializes in similar products.

In the first quarter of this year, Yuebao's money market fund climbed by more than 132 billion yuan to reach 711 billion yuan. That was an increase of 31.4 percent compared to the same period last year. The e-commerce platform also has 185 million registered users.

But money market funds are not the only products on offer. The P2P lending sector has mushroomed with the boom in smart technology.

Last year, there were about 1,200 Chinese P2P lending companies, including big-hitters such as CreditEase Corp, Shanghai Lujiazui International Financial Asset Exchange, and the Shenzhen-based Hongling Capital.