More the merrier for Touchmedia
Touchmedia, which puts interactive media in taxis, plans to double the size of its digital panel network each year, banking on the mainland's rapid economic growth and increased advertising spending.
The outdoor media specialist - funded by several private equity groups, such as CDIB Capital and Qiming Ventures - will add 10,000 interactive display panels to taxis during the second half of this year, bringing its total to 40,000, according to founder and chief executive Micky Fung.
The company has already installed an additional 10,000 panels to expand its taxi fleet network so far this year.
Touchmedia collects fees from advertisers for playing their content and commercials on the digital panels in taxis, while paying cab companies a leasing fee.
'We are going to double the number every year in the coming years,' Fung said in an interview yesterday. 'I believe China is the future [of the advertising business].'
Touchmedia now operates in Beijing, Shanghai, Guangzhou and Shenzhen and is set to expand its presence to 12 cities next year with a total 80,000 panels, Fung said.
The company, whose revenue is mainly derived from the advertising sales, has attracted global brands such as Standard Chartered Bank, Budweiser, Procter & Gamble and H&M.
Neil Ducray, managing director of Shanghai-based Touchmedia, said it was looking to diversify its businesses into payment services and social networking by making the most of the digital panel network.
Fung, a Chinese-American entrepreneur, founded Touchmedia in 2003 after he came up with the idea of entertaining bored passengers with interactive advertising panels.
The company has been profitable but Fung would not disclose its listing plan.
Touchmedia has received a combined US$40 million of private-equity and venture-capital investments so far.
Fung said the recent accounting scandals involving Chinese companies traded overseas would not affect Touchmedia's future listing.
'It shouldn't have an impact on us,' Fung said. The private equity and venture capital investors had already helped make its accounting books clean and credible.
China's leading internet and media companies, including web portal Sina, search engine Baidu and digital advertising network operator Focus Media, have already listed shares in New York.
The mainland's outdoor advertising market grew 16 per cent to 27.3 billion yuan (HK$35.09 billion) in 2010, according to CTR Media Intelligence.
Fung, a child of Hong Kong immigrants, grew up in New York. He had planned to go back to the United States but changed his mind when he came to understand the potential of the mainland market. 'It is never-ending,' he said. 'Every day you think of growing your business in a market with a strong potential.'
The proportion by which the mainland's outdoor advertising market grew last year, to 27.3 billion yuan, CTR Media Intelligence says