Launch of new instant scratch lottery to shake up China market

Instant scratch lottery cards generated 28.5 billion yuan in sales last year, according government figures

PUBLISHED : Wednesday, 05 July, 2017, 8:01am
UPDATED : Wednesday, 05 July, 2017, 8:01am

SF Lottery, a joint venture by Hong Kong-listed AGTech and Chinese logistics firm SF Express, on Tuesday launched a new instant scratch lottery product in four Chinese provinces in a bid to shake up the country’s lucrative lottery market.

Dubbed “SF-themed instant scratch lottery” and approved by China’s finance ministry as a national lottery product, the new instant scratch cards will be distributed in Guangdong, Jiangsu, Hunan and Jiangxi provinces via the thousands of couriers in SF Express’ network, and in SF Best, the company’s offline retail stores.

“Previously, people who want to buy lottery scratch cards have to go to authorised lottery centres to purchase them,” said Jimmy Bai, chief operating officer of AGTech.

“But SF-themed instant scratch lottery cards can be purchased conveniently and instantly from the SF courier whenever users receive a parcel.”

Users can also place bulk orders for the SF-themed lottery scratch cards and have it delivered to their doorstep, he said.

Guangdong and Jiangsu ranked first and second respectively in terms of sports lottery sales volumes in 2016, according to data from the Ministry of Finance, making these two provinces attractive starting points for SF Lottery.

Previously, people who want to buy lottery scratch cards have to go to authorised lottery centres to purchase them
Jimmy Bai, AGTech

The company hopes to expand the availability of the SF-themed instant scratch cards to the rest of the country by the fourth quarter of this year, it said.

The new lottery product was jointly developed by SF Lottery and China’s National Sports Lottery Administration Centre, the authority for sports lottery tickets.

Instant scratch lottery cards are a lucrative business in China, generating 28.5 billion yuan (US$4.19 billion) in sales last year, according to figures by China’s Ministry of Finance.

Denominations for the instant scratch cards come in 1 yuan, 5 yuan, 10 yuan and 20 yuan. The top prizes for each denomination range from 10,000 yuan to 1 million yuan.

Lottery winners of the SF-themed cards can also redeem their cash prizes by scanning a QR code on the lottery card with the SF Financial app, without having to go to authorised offline redemption points.

The distribution methods of the SF-themed instant scratch lottery cards not only give users a convenient way to purchase the scratch cards, but could also help expand the demographic of lottery buyers, Bai said.

While lottery buyers could be predominantly older, the company’s research and trials showed that over 80 per cent of SF-themed lottery scratch card buyers are female, with the majority between the ages of 20 and 35.

“Through SF-themed instant scratch lottery, we hope to make lottery scratch cards easily accessible as a form of entertainment to a greater number of people,” Bai said.

E-commerce juggernaut Alibaba’s financial affiliate Ali Fortune last March splurged HK$2.39 billion to buy a controlling stake of almost 60 per cent of AGTech, which already operates lotteries in China. The deal allows Alibaba to explore opportunities in the lottery business.

Alibaba owns the South China Morning Post.