Banking on growth in mobile tech
A visitor reads a brochure in front of a promotional board at the opening of the 2014 China Internet Conference on Aug 26 at the Beijing International Convention Center.
Early-bird advantage bound to help ‘unconventional’ 99wuxian.com
Mobile devices will soon play a more important role in everyday lives and encompass a range of activities like locking a door, driving a car, booking a table at a restaurant, paying utility bills and shopping, said Zhang Li, president of 99wuxian.com.
The Hong Kong-incorporated company operates an online marketplace that can be used on smartphones and other handheld devices and allows consumers to purchase physical and intangible items through online service providers. “It (mobile devices) is certainly the future,” said Zhang.
Shopping via mobile phones is something that is already familiar to most Chinese consumers, says Zhang, adding that she buys groceries from the online supermarket Yihaodian.com while waiting for a train or plane. But what her company is doing is something much more than that. 99wuxian, often likened to an unconventional B2B2C platform, serves as a bridge that connects the commercial banking system and product providers on its mobile phone e-commerce platform.
According to Tianjin-based Tian Hong Asset Management Co Ltd, the number of users who have bought the popular online financial product Yu’ebao introduced by Alibaba exceeded 100 million by mid-July, with the total volume of the product amounting to over 574 billion yuan ($93 billion).
It is trends like these that have made commercial lenders realize the magnitude and importance of Internet technologies and the role that they play in long-term growth, said Zhang. “The Internet technologies have helped the commercial lenders get connected to more stores and users and thereby more profits.”
99wuxian.com was officially launched in 2011 and considers itself a bridge that caters to all needs. The company says that several online and offline stores are connected to commercial lenders through its mobile phone platform. Thanks to the growing number of products and services on the platform, 99wuxian also earns good revenue.
At the same time, Zhang admits that the changing market landscape was not something that she envisaged when the company was set up. “I used to believe that payment channels are indispensable for the future development of mobile Internet. But over time, I have realized that it is more important to provide value-added services to customers. Demand for payment services will increase along with the growth in the products and services on the platform,” she said.
Zhang believes that transactions made from mobile phones will ultimately define the future consumption trends. “Though mobile e-commerce started rather late in China, in 2009 to be precise, it has evolved rapidly from 2012 onwards. Several e-commerce leaders such as Alibaba and JD.com have included mobile payment results in their financial reports lately, and such business accounts for 20 to 30 percent of their overall revenue.”
Mobile Internet, Zhang says, is one sector where companies like 99wuxian are in the same boat as others. “Every player is at the same stage. On the other hand, in e-commerce, companies like Alibaba are way ahead of competition. We have decided to focus on mobile Internet, as it is our core capability and inherent advantage and something for which we have abundant resources. More importantly, we are one of the early birds,” Zhang said.
99wuxian managed to make profits just a year after it was established, which is rare among e-commerce companies. Its total transaction volume amounted to 4.96 billion yuan last year, while profits during the first six months of the year stood at about 5.9 million yuan.
Currently, 99wuxian has 32 million registered users. But the company and the lenders it has been working with have around 330 million consumers who have downloaded the smartphone applications. In this sense, about 10 percent of 99wuxian’s partners’ customers have turned into its users, Zhang said.
“What this means is that there is ample room for growth. We plan to increase the total number of registered users to 100 million by the end of next year,” she said, adding that the company is already the market leader in the B2B2C sector in China.
Though 99wuxian successfully listed its shares in Australia last year, Zhang says that the company’s rapid growth has not been truly reflected in its share prices. “We are considering other capital market options so that they truly reflect the company’s value. We also have a rich treasure trove of valuable customer data.
“Every Internet company will follow a zigzag path when they are trying to expand their businesses. This is something that no one can avoid. Therefore, we don’t want to go a roundabout way when it comes to the capital market. That’s why we decided to go public. I am happy that we are on the right track for continuous, rapid long-term growth,” she said.
To Zhang, everything is about timing. “You have to pick the right timing. One cannot start too early, as there is no mature market yet. But you cannot start too late either, because that would mean lagging behind,” she said.
Describing herself as “an old soldier in the Internet industry”, Zhang says she has remained with the Internet industry all through her career. During her first three years of working at Hong Kong’s largest information and communications technology company PCCW, she worked with the team to promote broadband Internet and helped boost revenue of the business by over 40 percent within two years. After that, she joined Ctrip in 2000 and soon became the general manager of Ctrip Hong Kong, where she managed to bridge the gap between today’s largest online travel agency and overseas hotels.
Recognizing the trends is also important for companies to succeed, she says, adding that most of 99wuxian’s early customers were in the age group of 23-35. But the same has now changed to 18-47. “It is just a matter of time,” she said.
“We seldom bought things online in the past. But now consumption habits have changed tremendously. Mobile phone users are always more active than the personal computer users and Internet companies develop more rapidly than traditional industries in general. Mobile users tend to rapidly pick up new habits,” she said.