Tom's JV with China Post will step up mobile e-commerce initiative
Joint venture with China Post to concentrate on mobile online retail as growth driver
Tom Group, which narrowed its net loss last year, has started to ramp up the mobile retail capabilities of its e-commerce venture with China Post after the operation saw sales volume double.
"We are focusing on mobile e-commerce this year. This will increasingly drive the volume of online shopping in the world's second-largest economy," Tom's chief executive, Ken Yeung Kwok-mung, said yesterday.
Yeung said he agreed with the suggestion by Jack Ma Yun, the chairman of Alibaba Group, at a conference on Wednesday that e-commerce on the mainland was entering a golden age and that online transactions would make up about 30 per cent of the country's total retail sales in the next five years.
However, Yeung said he expected half of that projected share of online retail would be from mobile e-commerce sales. "Our partnership with China Post would generate both mobile and offline transactions," he said.
The venture also targets the vast majority of domestic consumers who do not yet shop online.
Beijing Ule E-Commerce, which Tom and China Post rolled out in 2010, provides an e-commerce platform that supports online and offline store integration, distribution and logistics, and marketing and promotion to merchants.
Unlike Alibaba's market-leading Taobao online retail operations, which rely on third-party logistics service providers, Ule.com is backed by the massive resources of China Post. This infrastructure includes 52,000 postal outlets, 150,000 postal delivery workers, 80,000 postal vehicles, 433 train carriages, 16 cargo aircraft and three ships.
Tom, the media conglomerate controlled by Li Ka-shing, reported yesterday that its net loss narrowed 32 per cent to HK$337 million last year from HK$498 million in 2011, helped by growth in its e-commerce and mobile internet platform businesses. It wrote off HK$136 million as "goodwill impairment".
Revenue slipped to HK$2.2 billion from HK$2.3 billion in 2011. Ule.com's gross merchandise value, the total worth of goods sold, reached 500 million yuan from 240 million yuan.
JPMorgan has forecast the gross merchandise value of the mainland's online shopping market in 2015 will be US$436 billion, accounting for 8.5 per cent of the country's total retail sales.