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27 August 2020
HONG KONG TELEVISION NETWORK LIMITED
(SEHK: 1137)
Interim Results
For the period ended30 June 2020
DisclaimerThis presentation and subsequent discussions may contain forward-looking statements and information that involve risks,
uncertainties and assumptions. Forward-looking statements are all statements that concern plans, objectives, goals, strategies,
future events or performance and underlying assumptions and other statements that are other than statements of historical fact,
including, but not limited to, those that are identified by the use of words such as "anticipates,'' "believes,'' "estimates,'' "expects,''
"intends,'' "plans,'' "predicts,'' "projects'‘, “target” and similar expressions.
The information included is solely for the use in this presentation and certain information has not been independently verified. No
representations or warranties, expressed or implied, are made as to, and no reliance should be placed on, the fairness, accuracy,
completeness or correctness of the information or opinions presented or contained in this presentation. The performance and the
results of operations of the Group contained within this presentation are historical in nature, and past performance is no guarantee
of the future results of the Group. Any forward-looking statements and opinions contained within this presentation are based on
current plans, estimates and projections, and therefore involve risks and uncertainties. Actual results may differ materially from
expectations discussed in such forward-looking statements and opinions.
Certain information in this presentation is extracted from Google Analytics and rounded to the nearest thousand. The computation
method and basis of which have not been verified. The data could be overlapping (a) between different type of devices among TV
Programme Platform and among Online Shopping Platform if the same user using more than one devices for browsing our Online
Shopping Platform at the same time; (b) or the same user using HKTVmall app to browse the HKTVmall web-page; (c) if the same
user using the same device to browse the online shopping mall through different channels/medias on the same device. The
information for the same period can be changed at different point of time when capturing the data as Google Analytics performs
the analysis on sampling basis. According to Google Analytics, the definition of “User” is “Users that have had at least one session
within the selected date range, which includes both new and returning users.” The above data are unaudited and are not indicative
of the Company’s business performance, financial condition or growth prospect. Readers should not place reliance on these data.
For figures generated from internal systems and relevant platforms, which were rounded up to nearest integral percentage or
thousand, are unaudited and for reference only.
We are not required to correct or update any such statement or information to either reflect events or circumstances that occur
after the date the statement or information is made or to account for unanticipated events or otherwise.
2
3
Part I: Operational and Financial Review
By Ms. Alice Wong, CFO
Part II: Business Review and Outlook By Mr. Ricky Wong, CEO and Vice Chairman
Part III: Q & A
Agenda
4
Part I: Operational and Financial Review By Ms. Alice Wong, CFO
Part II: Business Review and Outlook By Mr. Ricky Wong, CEO and Vice Chairman
Part III: Q & A
Agenda
Jun 201915,000 orders/day
Dec 201918,700 orders/day
Jun 202029,800 orders/day
Jul 202036,300 orders/day
Jun 2019HK$ 7.5 mn
Dec 2019HK$ 8.7 mn
Jun 2020HK$ 14.4 mn
Jul 2020HK$ 20.0 mn
-
5.0
10.0
15.0
20.0
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Average Daily GMV on Order Intake (HK$mn)Average
Daily Orders Average Daily Orders
Average Daily GMV on Order Intake (HK$mn)
Largest Online Ecosystem in Hong Kong –Growth Momentum Continued from 2019 + Acceleration from COVID-19 Pandemic
5
Source: GMV and Average Daily Order – Internal platform and system
Gross Merchandise Value (“GMV”) on order intake represents the total gross sales dollar value for merchandise sold through a particular marketplace over a certain timeframe, before deduction of any discounts offered by the marketplace, rebate used, cancellation and returns of merchandise sold.
Jun 2019449,000 orders/month
Dec 2019580,000 orders/month
Jun 2020893,000 orders/month
Jul 20201,124,000 orders/month
Jun 2019HK$ 224.6 mn Dec 2019
HK$ 270.8 mn
Jun 2020HK$ 431.0 mn
Jul 2020HK$ 620.4 mn
-
100.0
200.0
300.0
400.0
500.0
600.0
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Monthly GMV on Order Intake
HK$'mn
Monthly Number of Orders
Monthly Number of Orders Monthly GMV on Order Intake (HK$'mn)
Annualized July 2020 Monthly GMV = HK$7.4bn Home Grown Ecommerce Platform
6
Source: GMV and Average Daily Order – Internal platform and system
Gross Merchandise Value (“GMV”) on order intake represents the total gross sales dollar value for merchandise sold through a particular marketplace over a certain timeframe, before deduction of any discounts offered by the marketplace, rebate used, cancellation and returns of merchandise sold.
Consolidated Income Statement – Turn Positive!
7
1H2020 1H2019
HK$'000 HK$'000 HK$'000 %
GMV on Order Intake 2,746,512 1,285,809 1,460,703 114%
GMV on Completed Orders 2,689,307 1,234,627 1,454,680 118%
Turnover 1,339,982 625,547 714,435 114%
Cost of inventories (676,483) (375,485) (300,998) 80%
Other operating expenses (574,950) (439,469) (135,481) 31%
Valuation (losses)/gain (4,400) 5,850 (10,250) -175%
Other income, net 31,530 32,641 (1,111) -3%
Finance costs (6,260) (4,247) (2,013) 47%
Income tax expenses (142) (228) 86 -38%
Profit/(loss) for the period 109,277 (155,391) 264,668 -170%
Profit/(loss) / GMV on Completed order (in %) 4.1% -12.6%
EBITDA/(EBITDA loss) 151,135 (123,921) 275,056 -222%
EBITDA/(EBITDA loss) / GMV on completed orders (in %) 5.6% -10.0%
Adjusted EBITDA/(Adjusted EBITDA loss) 175,678 (132,699) 308,377 -232%
Adjusted EBITDA/(Adjusted EBITDA loss) / GMV on completed orders (in %) 6.5% -10.7%
Variance
Sustainable Growth Momentum
GMV on order intake
Gross Merchandise Value (“GMV”) on order intake represents the total gross sales dollar value for merchandise sold through a particular marketplace over a certain timeframe, before deduction of any discounts offered by the marketplace, rebate used, cancellation and returns of merchandise sold.
Turnover
453.8
616.6
816.7
1,074.5
1,285.8
1,493.3
2,746.5
-
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
HK$'M1H2017 2H2017 1H2018 2H2018 1H2019 2H2019 1H2020
113.6%
203.9
283.4
388.6
507.8
625.5
788.4
1,340.0
-
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
HK$'M1H2017 2H2017 1H2018 2H2018 1H2019 2H2019 1H2020
114.2%
8
Product Categories Mix – Groceries is the New customer entrance point, Recurring purchase catalyst and Foundation for cross selling!
9
Groceries43.6%
Beauty and Health23.6%
Digital and Electronics
13.0%
Houseware and Household
8.3%
Mother and Baby5.1%
Others6.4%
Groceries36.8%
Beauty and Health21.3%
Digital and Electronics
17.1%
Houseware and Household
8.3%
Mother and Baby5.7%
Others10.8%
1H2020 GMV on Completed Orders 1H2019 GMV on Completed Orders
GMV on completed orders represents the total gross sales dollar value for merchandise sold through a particular marketplace and the customer has obtained control of the promised goods and
services ordered over a certain time frame, after deduction of any discounts offered by the marketplace, cancellation and returns of merchandise, and is before the deduction of HKTVmall Dollars and
promotional coupon which is considered as advertising and marketing expenses under management reporting purpose.
On Completed Orders and Adjusted Basis1H2020
HK$'000
1H2019
HK$'000Variance
Direct merchandise sales
GMV on completed orders 1,2 939,411 500,033 88%
Cost of Inventories (676,483) (375,485) 80%
Gross profit 262,928 124,548 111%
Gross margin % 28.0% 24.9%
Income from concessionaire sales and other service income
GMV on completed orders 1 1,749,896 734,594 138%
Merchant payments (net off by annual fee, delivery and other service income) 3 (1,346,737) (597,277) 125%
Income from concessionaire sales and other service income 403,159 137,317 194%
Blended commission rate 23.0% 18.7%
Total GMV on completed orders 2,689,308 1,234,627 118%
Total gross profit and income from concessionaries sales and other income 666,088 261,865 154%
Blended GP/commission rate 24.8% 21.2%
Other advertising income and licensing income
Net advertising income 9,950 1,868 433%
Other program license income 173 1,825 -91%
10,123 3,693 174%
Growing Revenue and Margin reaching 24.8%, up by 3.6% vs. 1H2019
Remarks:
1. GMV on completed orders represents the total gross sales dollar value for merchandise sold through a particular marketplace and the customer has obtained control of the promised goods and services
ordered over a certain time frame, after deduction of any discounts offered by the marketplace, cancellation and returns of merchandise, and is before the deduction of HKTVmall Dollars and promotional coupon
which is considered as advertising and marketing expenses under management reporting purpose.
2. For Direct merchandise sales, the GMV on completed orders is before the deduction of HKTVmall Dollars of HK$3,282,000 (1H2019: HK$3,127,000) and use of promotional coupon of HK$10,840,000
(1H2019: HK$12,813,000).
3. For Income from concessionaire sales and other service income, it is before the addition of net HKTVmall Dollars of HK$1,411,000 (1H2019: HK$444,000) and included merchant annual fee amortisation and
other service income.
10
Improvement on Gross Profit and Blended Commission Rate
Standardized
Commission Scheme and
Annual Fee
effective from 1 Jan 2020
• Standardized Categorical
Commission Scheme
• Unified Delivery Method
• Annual fee with in-mall and
digital advertising value
https://cloud.marketing.hktvmall
.com/aogplan
75.8 95.7 110.2 131.8 160.5 201.6 228.1 218.1 234.7 291.3 330.6
515.3
656.2
28.6%
35.9%33.9%
36.5% 36.8%
42.0% 40.9%
35.9%37.4%
42.0% 42.4% 40.6%
46.2%
26.7% 25.4%23.7% 23.7% 24.6% 25.7% 26.5% 27.0% 26.1%
23.8%27.1% 28.1% 28.3%
0%
10%
20%
30%
40%
50%
60%
0
100
200
300
400
500
600
700
800
900
1,000
HK$'mn Groceries
19.0 24.6 46.3 56.1 73.6 51.9
79.4 126.5 136.8 150.6 171.1
336.5 297.3
7.2%
9.2%
14.3%15.5%
16.9%
10.8%
14.2%
20.8%21.8% 21.7% 22.0%
26.5%
21.0%21.3%
20.0%19.1% 19.6% 19.3% 19.3%
20.4%
19.1% 19.0%17.7% 18.4%
20.0% 21.2%
-
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
0%
5%
10%
15%
20%
25%
30%
HK$'mnBeauty and Health
11
26.8 31.4 44.7
58.9 77.9
95.8 92.5 103.2 108.1
96.2 103.2
165.8 183.3 10.1%
11.8%
13.8%
16.3%
17.9%
20.0%
16.6%17.0% 17.2%
13.9%13.2%
13.0% 12.9%
14.4%13.7%
13.1%12.1% 11.7%
10.0%
13.0%12.3% 12.2% 12.5% 12.7%
15.1% 15.1%
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
HK$'mnDigital and Electronics
9.5 8.9 13.0 14.5 20.6 23.7
29.8 35.3 36.7 43.7 46.3
69.7 68.3
3.6% 3.3% 4.0% 4.0%4.7% 4.9% 5.4% 5.8% 5.9% 6.3% 5.9% 5.5%
4.8%
13.9%
17.9%
15.8%
17.6%
14.1%13.4%
15.8%17.0%
15.2%16.5%
18.1%
19.6%18.9%
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
HK$'mn Mother and Baby
122.8
91.1 87.9 66.3 68.8 66.4
79.8 73.2 59.8
62.1 72.4
71.6 102.1
46.3%
34.2%
27.1%
18.2%
15.8%
14.0% 14.4%12.0%
9.6% 8.9% 9.3%
5.6%7.2%
20.5%18.9% 19.4%
18.0%
18.5%21.0% 19.9% 20.8%
22.3%24.0%
22.0%
26.5%
22.9%
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
HK$'mn Others
11.3 14.9 22.6
34.1 34.8 40.0 47.2 51.6 50.6 50.3 55.4
111.4 111.8
4.3%5.6%
7.0%
9.4%8.0% 8.3% 8.5% 8.5% 8.1%
7.2% 7.1%8.8%
7.9%
24.8%
22.8%21.9%
24.5%
20.6%22.3%
23.1% 23.6% 23.4% 23.5%21.9%
25.3% 26.0%
0%
5%
10%
15%
20%
25%
-
20.0
40.0
60.0
80.0
100.0
120.0
HK$'mn Houseware and Household
Improvement on Gross Profit and Blended Commission Rate
12
Other Operating Expenses –narrowed by 14.2% as a % of GMV on completed orders
• Fulfillment costs : Efficiency improved from 15.9% in 1H2019 to 11.4% as a % of GMV on completed orders in 1H2020, mainly due to full effect of TKO automated
sorting and storage system in 1H2020, new launch of cross-belt conveying system at Tuen Mun distribution centre since Feb 2020, plus efficiency gain from increase in
number of orders.
• Marketing and promotional costs : if including the HK$12.7mn mall dollars granted and promotional coupon used which was deducted in Turnover for reporting purpose,
the total marketing and promotional costs accounted for 2.9% GMV on completed orders (1H2019: 7.3%). The efficiency was mainly due to nil TVC, reduced company out-
of-pocket on digital advertising as most are bored by merchants and suppliers, and natural growth in online purchase demand in 1H2020. Moreover, increase in shop pick-up
option by customers also resulted in increase in re-charges of shop expenses to Fulfillment costs.
• Ecommerce operation and supporting functions: stable operating costs caused efficiency gain reaching 5.1% of GMV on completed orders.
As a % of GMV on 1H2020 As a % of GMV 1H2019
Functions completed orders HK$'mn on completed orders HK$'000 HK$'mn in %
Fulfillment cost (note 1) 11.4% 306.6 15.9% 196.6 110.0 -4.5%
Marketing and promotion including O2O shop (note 2) 2.5% 66.4 6.1% 75.1 (8.7) -3.6%
Ecommerce operation and supporting functions 5.1% 136.6 9.6% 118.1 18.5 -4.5%
0.0%
Non-cash items (note 3) 2.4% 65.4 4.0% 49.7 15.7 -1.6%
0.0%
21.4% 575.0 35.6% 439.5 135.5 -14.2%
Total GMV on completed orders 2,689.3 1,234.6
Note 1: Included depreciation – right-of-use assets of HK$20.9 million (1H2019: HK$12.7 million), excluded interest on lease liabilities of HK$3.0 million (1H2019: HK$1.5 million).
Note 3: For comparison purpose, excluded depreciation – right-of-use assets of HK$42.1 million (1H2019: HK$29.4 million).
Note 2: Excluded HKTVmall Dollars and promotional coupon of HK$12.7 million (1H2019: HK$15.5 million) being deducted in turnover, included depreciation – right-of-use assets of HK$21.2 million (1H2019: HK$16.7
million), and excluded interest on lease liabilities of HK$1.3 million (1H2019: HK$1.0 million).
Variance
13
Consolidated Statement of Financial Position –back by solid Liquidity and Properties
14
1. Property, plant and
equipment:
Scalable Owned
Infrastructure: Included self-
owned TKO Headquarters plus
Fulfillment Centres of over
370,000 Sq. Ft;
Investment properties with
secured long leased of about
75,000 Sq. Ft.
2. Strong liquidity with
investment in Other Financial
Assets and cash balance of
approximately HK$1.1 bn.
Jun-20 Dec 2019
Note HK$'000 HK$'000 HK$'000 in %
Property, plant and equipment 1 1,130,418 1,139,052 (8,634) -1%
Right-to-use assets 242,695 270,764 (28,069) NA
Intangible assets 67,189 73,723 (6,534) -9%
Other financial assets (Fixed income and Equity investment)
Non-current 2 349,760 472,284 (122,524) -26%
Current 2 68,247 83,268 (15,021) -18%
Other receivable, deposits and prepayments 3 127,292 114,779 12,513 11%
Inventories 4 119,568 95,763 23,805 25%
Pledged bank deposits 3,905 3,905 - NA
Cash at bank, in hand and term deposits 669,371 149,713 519,658 347%
Total Assets 2,778,445 2,403,251 375,193 16%
Accounts payable 242,808 168,718 74,090 44%
Other payables and accrued charges 5 261,605 178,036 83,569 47%
Deposits received 5,757 5,757 - 0%
Bank loans - 315,015 (315,015) -100%
Lease liabilities 256,185 282,929 (26,744) NA
Deferred tax liabilities 1,086 1,188 (102) -9%
Total Liabilities 767,441 951,643 (184,202) -19%
NET ASSETS 2,011,004 1,451,608 559,396 39%
Share capital 1,746,761 1,293,392 453,369 35%
Reserve 264,243 158,216 106,027 67%
TOTAL EQUITY 2,011,004 1,451,608 559,396 39%
Variance
14
15
Managed CAPEX for Sustainable Growth
Additions for 1H2020 is mainly for automated fulfillment systems, warehouse equipment, additional
multi-temperature delivery trucks, network server and capacity provisioning, O2O new shops renovation
and equipment, etc.
259.6
125.1 111.3
70.8
26.4
128.4
46.0 62.5
45.8
131.3
241.1
112.7
76.9 77.5 62.6 57.5
82.4
43.3
2016 1H 2016 2H 2017 1H 2017 2H 2018 1H 2018 2H 2019 1H 2019 2H 2020 1H
CAPEX excluded right-to-use assets upon adoptions HKFRS 16 (HK$mn)
Cash Outflow on CAPEX included Deposits Paid (HK$mn)
15
Agenda
16
Part I: Operational and Financial Review
By Ms. Alice Wong, CFO
Part II: Business Review and Outlook By Mr. Ricky Wong, CEO and Vice Chairman
Part III: Q & A
Tipping Point
17
1. “Online Supermarket” to “Online Shopping Mall”
2. Final Stage to build “Digital Ecosystem”
• Integral part of the digital lives of HK consumers
• Centre of all digital commercial activities
3. Commercialize our inhouse systems, provide an
end-to-end technical solution to global markets
18
Turnover increased significantly by 114.2% compared to
1H2019
Gross profit margin (including the gross profit margin for HKTVmall
self-operated stores and commission rates received from other merchants)
increased from 21.2% in 1H2019 to 24.8% in 1H2020
Fulfilment costs accounted for 11.4% of GMV, versus 15.9%
in 1H2019
The 1st Turnaround to Profit over 5 years!
Remark:
1. Quarterly Fulfillment Costs as a % of GMV on complete order included the interest on lease liabilities under HKFRS 16 in relation to fulfillment centre, which is classified as finance costs in the consolidated income statement.
2. Blended Gross Margin / Commission Rate is calculated before deduction of HKTVmall Dollars and use of promotional coupon (if any), which is considered as advertising and marketing expenses under management reporting purpose.
-40.2%
-26.3%
-19.3%
-12.9%
-6.1%-1.1% -0.9%
0.9% 0.4% 2.0%3.3% 3.6% 4.6% 5.7% 4.8%
8.2%
13.1% 13.5%
58.7%
49.3%
41.3%
34.8%
28.2%
22.6% 21.9%
19.3% 20.0%17.8% 17.2% 18.0%
16.7% 15.4% 15.9%
13.9% 11.5% 11.5%18.5%
23.0% 22.0% 21.9% 22.1% 21.5% 21.0%
20.2% 20.4%19.8% 20.5% 21.6% 21.3% 21.1% 20.7% 22.1%
24.6% 25.0%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Spread = (B) - (A)
Quarterly Fulfillment Costs as a % of GMV on complete order (A)
Quarterly Blended Gross Margin / Commission Rate (B)
In 1H2020, other operating expenses including marketing and promotion, Ecommerce operation and supporting functions and
non-cash items only accounted for 10% of the GMV on completed orders
Managed Spread reached 13.5% in Q2 2020
19
1H2020 1H2019 1H2018 1H2017
As a % of GMV
on completed
orders
HK$ million
As a % of GMV
on completed
orders
HK$ million
As a % of GMV
on completed
orders
HK$ million
As a % of GMV
on completed
orders
HK$ million
Fulfilment Costs 11.4% 306.6 15.9% 196.6 18.6% 148.4 24.8% 108.7
Marketing, promotional and
O2O shop operating expenses2.5% 66.4 6.1% 75.1 5.9% 47.1 5.6% 24.7
Ecommerce operation and
Supporting functions5.1% 136.6 9.6% 118.1 11.5% 92.0 18.1% 79.2
Major non-cash items 2.4% 65.4 4.0% 49.7 6.1% 48.8 8.0% 35.1
Total Operating Expenses 21.4% 575.0 35.6% 439.5 42.1% 336.3 56.5% 247.7
Solid Foundation : Both Variable Cost % & Fixed Cost % Downward
20
21
1st Question : Why only HKTVmall?Answer : We own the technology & technical know-how
• Product Description
• Search Engine
• Fulfilment Design and Automation
• Last Mile Routing Optimization and Planning
Online Retail –fulfilment in Warehouse
• Store Location
• Store Renovation
• Racking Arrangement and Display
Offline Retail –fulfilment in Store
If offline retailers adopt the same operation and manual pick pack flow to online platform, will only bring
• low accuracy
• high picking cost
• infeasible and unsustainable business model
Big Data Analysis 400,000 sq. ft. Auto Warehouses
Largest HK ResidentialDistribution Network
Their successful experience from Offline does not apply to OnlineWe successfully build up a profitable model which won’t be easy to replicate
-18°C
compartment
for frozen
food
0-4°C
compartment
for chilled
food
22
Scalable Technology Deployed for Different Fulfilment Purposes
23
2nd Question: Would HKTVmall survive if Overseas giants march in HK market?Answer: Sustainable Dominant Position in Hong Kong
Geographical Advantage
• Cultivated in local market for past 5 years, we are familiar with the unique consumer habits, operation cost structures, as well as the transportation and logistics system in Hong Kong
High Barrier
• We built HKTVmall ridding on “Infrastructure” and being “Open-minded”, not on “Sales and Marketing” but Technology
• We invested 5-year to build high barriers for others to catch up
Investment and Innovation
• We do not stop from where we are now, but constantly think ways of doing better by innovation
• Invest in various Operational Engineering and TECH Projects to strengthen our dominant position in the Hong Kong Online Ecosystem
24
25
The COVID-19 pandemic has not “changed” consumer behaviour, but has only
“accelerated” the transformation of the consumer habits.
In the first half of this year, new customers of HKTVmall only accounted for 16.3% of
GMV on order intake, and most of our business growth came from existing customers
acquired in 2019 or before.
We believe, if customers maintain 5 to 6 times of purchase over a period of 6 months,
“online shopping” will become a part of their consumption habits.
3rd Question: Will consumers go back offline after the pandemic? Answer: Once “Online”, hard to go back “Offline”
-
5.0
10.0
15.0
20.0
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Jan 2
01
7
Feb 2
017
Mar
2017
Apr
2017
May 2
01
7
Jun 2
01
7
Jul 2017
Aug
201
7
Sep
201
7
Oct 20
17
Nov 2
017
Dec 2
017
Jan 2
01
8
Feb 2
018
Mar
2018
Apr
2018
May 2
018
Jun 2
01
8
Jul2
018
Aug
201
8
Sep
t 2018
Oct 2018
Nov 2
018
Dec 2
018
Jan 2
01
9
Feb 2
019
Mar
2019
Apr
2019
May 2
019
Jun 2
01
9
Jul 2019
Aug
201
9
Sep
201
9
Oct 20
19
Nov 2
019
De
c 2
01
9
Jan 2
02
0
Feb 2
020
Mar
2020
Apr
2020
May 2
020
June 2
020
Jul 2020
Aug
202
0
Sep
202
0
Oct 20
20
Nov 2
020
De
c 2
02
0
Jan 2
02
1
Feb 2
021
Mar
2021
Apr
2021
May 2
021
June 2
021
Jul 2021
Aug
202
1
Sep
202
1
Oct 20
21
Nov 2
021
De
c 2
02
1
Average Daily GMV on Order Intake (HK$mn)
Average Daily Orders
Largest Online Ecosystem in Hong Kong –Growth Momentum Continued from 2019 + Acceleration from COVID-19 Pandemic
26
Source: GMV and Average Daily Order – Internal platform and system
Gross Merchandise Value (“GMV”) on order intake represents the total gross sales dollar value for merchandise sold through a particular marketplace over a certain timeframe, before deduction of any discounts offered by the marketplace, rebate used, cancellation and returns of merchandise sold.
Open Data Bank
Big Data opening up to
build HK a Smarter City
E-Wallet
Extending to payment
services, for enhancement of
consumers’ shopping
experience
Shopping Channel
Direct sales channel and
content marketingHKTVmall
Food
Offer takeaway and food
delivery with location-based
promotions
HKTVmall Lite
Simplified version for Golden Agers to enhance social and
family bonding
Opening Landing Page
Merchants & KOL to build their own content page as traffic generator
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Realization of Digital Ecosystem
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Realization of Digital Ecosystem: Open Data Bank
BIG DATA = OIL MINE
• Accumulated substantial customer data in past 5 years
• Open up data to fuel for real growth of HK digital ecosystem
1st Phrase: Universities / Tertiary Institutions / Research Institutes / Digital Media Agencies / Banks
E.g. : Sales Transaction / User Traffic / Logistics /
Warehouse Performance etc.
29
Realization of Digital Ecosystem: Food Takeaway
Strong Customer Database Connecting HKTVmall,
Customers & Local Restaurants
What we have ——
• Target launch: Sep – Oct 2020
• 3,000 partnering restaurants
• No. of daily visitors: 250,000 customers
• 2020 first half year: 813,000 unique customers
1 out of 10 HK people shopped in HKTVmall
30
Realization of Digital Ecosystem: eWallet
• Customer Profiling: by reviewing customers’ online & offline purchasing data
• More integrated view on consumers’ online & offline shopping behavior
31
Realization of Digital Ecosystem: Live Shopping Channel
More than a shopping mall
Build stronger partnership with retail brand owners
Create additional in-mall advertising income
Content Providers
Merchants and Brand Owners
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Realization of Digital Ecosystem: Open Landing Page
• Customized Product Introduction
• Allow content providers to build & manage
their own content (E.g. Merchants, KOLs) • Tighten the bonding
Customers
Next 3 Years…?
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GMV on Order Intake
HK$3.38bn HK$2.75bnHK$2.8bn
~ HK$3.0bn
2020 full year Target
(as announced on
9 Jan 2020)
1H 2020
Actual
2H 2020
Outlook
Hong Kong Market 2020 Outlook and Target
COVID-19 pandemic is not expected to slow down completely though people will
have impulse to go out!
Once go online, won’t go back to offline!
Current fulfilment systems are capable to handle additional 50% orders.
Start to plan for the next Capacity Expansion
1. Expansion of e-fulfilment centre at Tseung Kwan O Headquarters
- Additional 50,000 square feet
- Anticipated construction cost at around HK$150 million
- Cost for facilities at about HK$50 million
2. Adding the 6th fulfilment centre
- Cost for facilities at about HK$40 million
3. Adding around 200 – 250 delivery trucks
- Cost at about HK$90 million to HK$110 million
4. Upgrade computer hardware and software
- Cost at about HK$50 million
Plan Ahead for Future – CAPEX plan in next 3 years
35
Source: Global Retail Trends 2020 – Preparing for the new reality, KPMG International, May 2020
COVID-19 Accelerates the Fundamental Trends in Global Retail
36
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• Which and what kind of system/platform should I use?
• Self-built or using licensed platform?
• What is the business model? Traditional Buy & Sell? Or let FMCG
brands to open stores inside the "Online Supermarket“?
• How to do the pick/pack fulfilment? Using "dark store", existing B-to-
B warehouse or setting up a new B-to-C warehouse?
• How to design the B-to-C warehouse? Who can help (and who is
not a competitor) to design the warehouse?
• What kind of automated machine(s) to be used? How to select?
How to design to be feasible enough to meet the "unknown" and
"dynamic" market?
• How to integrate and connect all these different kind of machines
with their Warehouse Management System?
• How to do the packing for different type of products (frozen and
chilled)?
• How to deliver? By own fleet or 3rd party?
• How to design the a system to optimize the truck utilization, routing,
allocation between own fleet and 3rd party, and service monitoring
• …………
• …………
If I were a "Traditional Supermarket Operator" and wish to start online, what issues I need to deal with :
38
Overseas MarketHuge Global Demand for End-to-End Turnkey Solution
An extension from HKTVmall core business to beyond the geographical limitation
- a market-tested and proven profitable solution
- leveraging on our Self-build End-to-End Infrastructure and Technical Knowhow
- to transform and enable the traditional supermarket chains and retailer groups to replicate the unique success and
capabilities of HKTVmall
eCommerce
Platform
In-mall / FB / Google Digital
Ad with HKTVmall
audience list
Order
processing
system
Merchant
Management
SystemPayment
Gateway
/ eWallet
eFulfilmentCentre
e.g. warehousing, pick/pack functions
Self-run
Multi-
Temperature
Controlled
Trucks
67 O2O
Concept
Stores
CustomerServices
- AI Platform
Chatbot
- CRM
- Machine
Learning
- Big Data
Analysis- Predictive
Intelligence
Online Groceries
Online Marketplace
Online Ecosystem
Core Business
Plan to Provide a Turnkey Solution to Global “eCommerce Marketplace” Investors
Only “piece by piece” “pure” software house & technical engineering
company is available.
No end-to-end turnkey solution provider (busines model consulting,
planning & construction of fulfilment centre, last mile delivery planning
& analysis) is available in global market
Except Ocado in UK, but Ocado only provides solutions for online
grocery store, not for shopping mall/platform (i.e. Amazon model)
We will set up 2-3 overseas offices to develop international business in
coming 6 months
39
Mission
Providing End-to-End technological
solution to set up online shopping
mall/platform, including:
• Business model consulting service
• Design & Construction: automated,
robotic warehouses• Last mile delivery system design
Providing End-to-End technological
solution to transform traditional offline
grocery stores to online:
• Business model consulting service
• Design & Construction: automated,
robotic warehouses• Last mile delivery system design
Providing a friendly and easy to use
system to help everyone set up their
own online store for selling products
TargetMarket Segment
For who want to compete with Amazon
in their own country:
• Traditional grocery retailers
• Shopping malls• Forward thinking retailers
Traditional (forward-thinking) grocery
retailers who want to set up online store
SME Business Owner: who want to
open their own online shop
Solutions Provided
An All-Round Solution:
• Migration path from an online grocery
store to an online shopping mall; then
to a digital eco-system
• Design & Build: I.T. Platform, pick-
pack fulfilment centre, fleet
management system• Focus on big data analysis and IT
An Online Grocery Store Total Solution
• Set up an online grocery store
• Design & build-up robotic pick-pack facilities
An Online Store Front-end Solution
• Set up an online store
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Ocado Shopify
IT Set-up Support(For shop/shopping mall)
For Buy & Sell Model (1PL)
Open Model to All Merchants (3PL)
Design of Pick & Pack Robotic System
Design & Build Fulfilment
Centre (For thousands of Merchant Orders)
Last Mile Delivery System Deign
41
Ocado Shopify
Hong Kong is a small city for e-Commerce & us
So we make it global
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