Tom Group, the media conglomerate managed by Hong Kong tycoon Li Ka-shing, prepares to step up the expansion of its e-commerce joint venture in mainland China with an enthusiastic venture into the online finance company.
Chairman Frank John Sixt stated in a filing with the Hong Kong stock exchange that Ule, the joint venture developed by Tom and China Post in 2010, will certainly introduce its online finance and loan items this year.
He expected this diversification by Ule will certainly need much deeper “cooperation with strategic partners to drive sales, cementing its market-leading position in rural e-commerce”.
In a filing with the Hong Kong stock market on Tuesday, Tom reported that Ule’s gross product volume – the total amount of products sold on the online retail site – jumped 354 per cent to 6.49 billion yuan (HK$ 8.17 billion) in 2013, up from 1.43 billion yuan in 2013, as more merchants in the countryside signed up with the e-commerce platform.
Supported by China Post’s huge facilities, Ule is motivating rural shopshopkeeper and villagers to shop and trade through its network of online, offline and mobile retail channels.
At the end of last year, more than 40,000 merchants in 21 provinces in mainland China were doing businessworking through Ule.
Ule’s online finance passions will be enabled through partner WeLab, an internet finance innovation business that introduced the first social, likewise knownreferred to as peer-to-peer, lending platform in Hong Kong.
The peer-to-peer financing market on the mainland is anticipated to reach US$ 7.8 billion this year, from US$ 940 million in 2012, according to a report from research and advisory firm Celent.
The connection in between Ule and WeLab was enabled last year after Tom signed up with California-based venturefinancial backing company Sequoia Capital and other investors in investing US$ 14 million in the Series A financing – the very first round of funding from external investors after seed capital – conducted by WeLab.
The mainland currently has about 1,000 peer-to-peer lending platforms, which have increasingly replaced the unlawful underground banking system. Big industrial banks on the mainland have always been unwilling to extend credit to little businessessmall companies, a space that would be filled by private lending operators.
In a study of 3,500 customers across the mainland, consultancy McKinsey found that more than 70 percent of respondents would open an account with a purely digital bank.
Sixt credited the mainland government’s efforts to modernise the countryside for the growth potential of Ule’s rural e-commerce approach.
“Riding on the substantial network of China Post, Ule has had the ability to offer a range of services to rural villagers consisting of concierge services, farming item procurement and expense payment services,” Sixt said.
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Retail e-commerce sales in the mainland increased 35 percent to US$ 426.26 billion in 2013, from US$ 315.75 billion in 2013, according to eMarketer’s estimates. That included all non-travel productsservices and products purchased online through desktop and mobile devicescell phones.
Hangzhou-based Alibaba Group Holdings continued to control the mainland e-commerce market last year though its retail devices Taobao Marketplace and Tmall.com.
The New York-traded business last month reported that its gross merchandise volume struck a record 787 billion yuan in 2013 as its yearly active buyers rose to 334 million, up from 231 million in 2013.
There is plenty more room to grow for online shopping on the mainland, according to eMarketer. It anticipated retail e-commerce sales on the mainland to reach US$ 1.01 trillion by 2018 and comprise 16.6 percent of overall retail sales, up from 10.1 percent last year.
Unlike most internet retail platforms on the mainland which target the significant cities, Ule has actually been concentrated on gathering company from the 90 percent of the mainland population still not shopping online.
Ken Yeung Kwok-mung, Tom’s chief executive, has mentioned that the next growth engine for Ule will be people in the nation’s 700,000 towns who will certainly access the internet for the very first time on smartphones.
Information released earlier this month by the China Web Network Information Centre reveal that the total variety of users accessing the web through smartphones and tablets reached 557 million at the end of last year. Overall online shopping users, however, can be found in at simply 361 million in the very same duration.
Tom and Ule have actually also each invested US$ 2million for a combined seven percent stake in start-up Rubikloud Technologies, a Canadian retail intelligence firm.
Sixt said Rubikloud will help Ule “grow its understanding of customers’ behaviour and offer personalized services, along with offer targeted marketing options for merchants”.
He included that Tom will certainly continue to invest in high-growth hi-tech businesses this year.
Tom on Tuesday reported that its losses narrowed to HK$ 84.88 million in 2013, compared with HK$ 550.07 million in 2013, on the strength of its e-commerce company and continued efforts to improve operating effectiveness. Overall earnings was HK$ 1.51 billion, below HK$ 1.93 billion in 2013.