SHANGHAI/BEIJING, Nov 9 (Reuters) - Days ahead of China's biggest retail event of the year, lenders and retailers are going all out to get consumers to borrow and to spend - from topping up credit lines to offering loans that come with chances to win even more cash.
Over a 24-hour period on Saturday, billions of dollars of discounted goods are expected to be sold online on Singles Day, China's version of Black Friday.
Chinese e-commerce colossus Alibaba Group Holding last year reported transactions topping $14 billion, and deals are expected to grow this year.
The annual Singles Day, originally a day for young college students to celebrate singlehood, has become a barometer of China's sprawling e-commerce sector.
The rise in consumer spending in a country traditionally viewed as a nation of savers has coincided with a sharp increase in consumer borrowing in recent years.
While consumer borrowing in China is still modest compared to mortgage loans and corporate borrowing, economists warn that household leverage is building up too rapidly.
For Rose Ji, a student from the northern port city of Tianjin, the pull of a deep discount on Singles Day for a personal photography session prompted her to borrow an otherwise unaffordable amount from a consumer lending firm.
"I've always wanted to be photographed, but the original price was 5,000 yuan ($754)," said Ji. "On Nov. 11, it's only 1,800 yuan."
Ji borrowed the full amount from Huabei, a consumer finance service whose name literally means "just spend" in Chinese. Ji, 21, will pay back the loan in six months at an interest rate of 4 percent.
On a colourful online advertisement sprinkled with cartoon skateboards and hamburgers, Huabei also offers borrowers a chance to win up to 4,999 yuan worth of shopping on spending receipts of just 200 yuan.
Huabei, launched by Alipay, an e-payment firm connected to Alibaba, also offers special Singles Day credit limit extensions.
JD Finance, the lending arm of JD.com, is giving shoppers the opportunity to enter into a draw with 1,111 chances to win prizes ranging from "red packets" of cash to having their shopping bills paid by the firm.
Fenqile.com, a small online loans firm, offers 12-month interest-free credit for some goods if loans are made for Singles Day purchases, and PPmoney.com, another small online credit company, is offering 8,888 yuan worth of credit that can be spent on the platform. The number 8 is considered lucky among Chinese.
The push by newer online lending firms and retailers to bolster consumer spending aligns with Beijing's plans to swivel a manufacturing-led economy to one driven by consumer demand and services.
But analysts warn that while household debt is low by Western standards, risks are rising as the economy cools.
"People over-extend themselves without considering the long-term consequences on their future financial wellbeing," said Rui Yao, associate professor at the University of Missouri. "Impulsive purchases on credit have been a growing problem for consumers."
For student Ji, the part-time work she does will pay a tenth of her Huabei loan. The rest, she says, will be covered by her parents.
($1 = 6.6306 Chinese yuan renminbi)
Reporting by Engen Tham in SHANGHAI and Ryan Woo in BEIJING, with additional reporting by Beijing and Shanghai newsrooms; Editing by Ian Geoghegan