P2P platforms expect strong market competition

The European P2P market is not yet highly competitive. However, the situation may change as early as next year.

Analysts of the Robo.cash platform assessed the competitiveness of the European P2P market using the reverse Herfindahl-Hirschman index (HHI)*. 

The industry is experiencing a trend of high concentration around key players that occupy more than half of the market. This is confirmed by the fact that its average HHI (reverse) from the beginning of 2017 to May 2023 amounts to 7095 points. “At some point, the activity of the industry leaders led to a decrease in the index and an increase in their monopoly power. But the P2P market, like others, is subject to various external events. With the COVID-19, market volumes declined and the HHI (reverse) rose, thereby opening the doors to future competition.” - the analysts comment.

The experts predict that competition in the market will intensify in 2024. The growth of promising platforms will lead to a decrease in the leader's market share.

*The Herfindahl-Hirschman Index (HHI) is a common measure of market concentration and is used to determine market competitiveness. In the classical understanding of US economists, if the value of HHI (reverse) is greater than 8500, then the market is considered highly competitive, if the HHI is less than 7500, then the market is considered highly concentrated (or monopoly).

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