Cash America 2013 Annual Report Download - page 39

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Competition
Pawn Lending Activities
The Company has many competitors to its pawn lending activities, such as retailers of new merchandise and
retailers of pre-owned merchandise, thrift shops, internet retailers, internet auction and other similar sites and other pawn
shops. The pawnshop industry in the United States remains very fragmented, with approximately 11,000 stores
nationwide operating in 2013 that were owned primarily by independent operators and, to a lesser extent, by publicly-
traded companies. The Company believes that it is the largest operator of pawnshops in the world. The three largest
domestic publicly-traded pawnshop companies, First Cash Financial Services, Inc., EZCORP, Inc., and the Company,
operated approximately 1,600 total pawnshops in the United States in 2013. During 2013, the Company was the largest
publicly-traded pawnshop operator in the United States based on pawn loan balances and number of pawn lending
locations. Management believes that the Company can achieve economies of scale and increased operating efficiencies
by increasing the number of stores under operation and utilizing modern point-of-sale systems and proven operating
methods. Management believes that the principal competitive factors in the pawnshop industry are location, quality
customer service, the ability to loan competitive amounts at competitive rates and adequate low-cost working capital.
The pawnshop industry in Mexico is fragmented and remains substantially less developed than it is in the United
States. There has been significant growth in the number of pawnshops servicing Mexico over the last several years to an
estimated 5,000 locations operating in 2013. Most of these locations provide loans secured only by gold jewelry and are
owned by independent operators and small chains, including some owned by not-for-profit organizations and publicly-
traded companies. The Company’s primary competitors in Mexico include Monte de Piedad, Luz Saviñón, Rafael
Donde, First Cash Financial Services, Inc. and EZCORP, Inc. A large percentage of the population in Mexico is
unbanked (or do not have a relationship with a bank) or underbanked (or have limited access to banking or other
financial services) and has limited access to consumer credit. The Company believes there is a future opportunity for
growth in the number of full-service pawn locations that offer loans secured by general merchandise as well as gold
jewelry in Mexico due to the large number of potential customers underserved through traditional credit providers and
the limited number of large pawnshop operators in the country.
Consumer Loan Activities
The Company offers consumer loans through many of its retail services locations through its retail services
segment. According to the Community Financial Services Association, industry analysts estimate that there were
approximately 21,000 consumer loan storefront locations across the United States during 2013. While the consumer loan
industry grew significantly during the 1990’s into the early 2000’s with the addition of new storefront locations, the
storefront growth has begun to contract in the past several years. This is due in part to changes in laws and regulations
governing consumer loans in various states.
The Company offers consumer loans over the internet through its e-commerce segment. Numerous competitors
offer consumer loan products and services over the internet, and many significant competitors are privately held, making
it difficult for the Company to determine its competitive position in the market. However, the Company believes its
principal competitors for its e-commerce segment in the United States include Miami Nation Enterprises, Integrity
Advance, Think Finance and certain offshore lenders, many of whom offer consumer loans under multiple brand names
and domains. In the United Kingdom, the Company believes that its principal online competitors include PaydayUK,
PaydayExpress, Wonga and Lending Stream. In Australia, the Company believes its main online competitors are
Nimble, Cash Converters and First Stop Money. In Canada, the industry has been dominated by storefront lenders and as
a result, the Company’s principal competitors are not online lenders but storefront lenders, such as Money Mart, The
Cash Store and Cash Money.
Storefront consumer loan lenders that offer loans online or in storefronts are also a source of competition in
most of the markets where the Company offers consumer loans through its retail services segment or e-commerce
segment, including Advance America, Ace Cash Express, Check ‘n Go, Dollar Financial and Check Into Cash.
Management believes that competition in the United States in the online consumer loan industry continues to be
fragmented and is primarily from competitors who may be operating either off-shore or by partnering with Native
American tribes and utilizing their status as a sovereign nation to attempt to immunize themselves from enforcement of
restrictive state laws and regulations. Management believes that the principal competitive factors in the online consumer