Tom Group looking to bounce back into profit
Hong Kong-listed Tom Group is betting on its rapidly growing e-commerce joint venture with China Post, the mainland's expanding mobile internet market and entry into Taiwan's television broadcast industry to drive the company's return to profitability.
'We are finally on the right track after all the investments we've made and the effort we've put in,' said chief executive Ken Yeung Kwok-mung (pictured). 'We believe the group is re-entering a growth period.'
Despite that upbeat forecast, the Li Ka-shing-controlled media conglomerate yesterday reported a wider net loss of HK$498 million last year from HK$168 million in 2010.
This was mainly due to a 29.5 per cent decrease in sales at its internet business and up to HK$293 million in investments made at its five business divisions - internet, e-commerce, television and entertainment, publishing and outdoor media.
Revenue slipped to HK$2.33 billion from HK$2.46 billion the previous year.
Tom also reported a HK$267 million write-off of older assets that it replaced with new 'cloud-computing' infrastructure. Cloud computing enables companies and consumers to buy, lease and receive software, information, music, games and other digital resources over the internet as an on-demand service, like electricity from a power grid.
'The mainland is characterised by a surge of income per capita, growth of domestic consumption and advances in 3G and 4G mobile networks, which present enormous opportunities to our mobile internet and e-commerce operations,' Yeung said.
Beijing Ule E-Commerce, Tom's online shopping joint venture with China Post, signed up more than 1 million users last year and recorded gross merchandise value - the total worth of the goods sold across the e-commerce service - of 240 million yuan in its first year of operations.
Market analyst firm iResearch sees more room for it to grow in the mainland's online shopping market, which is forecast to reach 1 trillion yuan this year from an estimated 771 billion yuan last year.
The venture is gearing up for strategic collaborations this year, including a co-branded debit card with the Postal Savings Bank, a shopping service over Shanghai Media Group's Bestv New Media internet-linked television service, and an online retail pact with New Zealand Post.
Tom has also entered Taiwan's broadcast industry through affiliate Cite Publishing, which last week won a licence to operate a satellite-based lifestyle television channel.
The number of people on the mainland who participated in online shopping last year, according to a report