HONG KONG, Apr 17, 2024 - (ACN Newswire) - Beijing Tecsun Venus Technology Limited, an indirect wholly-owned subsidiary of Phoenitron Holdings Limited (8066.HK), has entered into a capital injection agreement with Hangzhou Bizike Intelligence Technology Company Limited, stating its intention to subscribe registered capital of Hangzhou Bizike. When the transaction is completed, Beijing Tecsun Venus will hold 20% of the enlarged registered capital of Hangzhou Bizike. It will mark the Group’s formal entry into the trillion-dollar e-commerce market in the PRC, as well as enable it to expand its business and broaden its income sources.
The e-commerce market in the PRC has continued to grow over the past few years. That and the outbreak of the COVID-19 pandemic have driven consumers to shop online and in turn speeded up growth of the country’s e-commerce market, short video platforms and live stream commerce, encouraging businesses to pursue offline-to-online transformation, with success hinging on online marketing and sales through online KOL livestreaming. According to the market research company eMarketer, the retail e-commerce market of the PRC is expected to continue its growth and reach approximately RMB28.8 trillion in 2027, indicative of its huge development potential.
To Phoenitron, the thriving e-commerce market presents it with an important opportunity that agrees with its growth strategy and aim to diversify business. Thus, the decision to acquire Hangzhou Bizike, which is in the e-commerce business, aims to support the Group in attaining strong growth of its business in the future and its ability to generate revenue. Hangzhou Bizike’s main business is to market and sell merchandises via livestreaming, and it also provides short video marketing and creates IP for KOLs. It started preparations for its livestreaming business at the end of 2022, focusing on three main highest ROI (Return-on-Investment) product categories, namely womenswear, health products and beauty products, and started to record revenue in 2023. In just 10 months between June 2023 and March 2024, the transaction value generated through livestreaming exceeded RMB90 million, which was rather remarkable.
At present, Hangzhou Bizike is serving a famous Chinese women's clothing brands, while also actively expanding its own brands and already has the brand LULU OCEAN registered. The brand specializes in women's sportswear for all seasons, such as yoga wear. Hangzhou Bizike plans to use funds from the transaction on livestreaming of its own proprietary brands to promote product sales. What’s noteworthy is the company’s senior management is made up of former senior personnel of e-commerce platforms such as “Alibaba” and the leading short-video platform “douyin”. Bringing with them profound relevant experience, they have seen Hangzhou Bizike claim the top spot among livestreaming platforms on the Tencent Video streaming website.
The capital injection will allow Phoenitron to make Hangzhou Bizike’s livestreaming capability its own, foray into e-commerce business, build its own proprietary brand and capitalize on the growth momentum of the retail e-commerce market of the PRC. It is clear that the Group, via pursuing its active business development plan, is continuously exploring growth opportunities in different fields and such efforts will open more room for growth to it in the future.
The Group has recently announced its 2023 results, with revenue up by a notable 35.3% to approximately HK$79.1 million, and turning around from net loss last year to net profit of approximately HK$4.3 million. Such results plus the capital injection will prompt the market to re-evaluate Phoenitron’s worth, acting as an important catalyst to the Group’s market performance in the short term. In the long run, at its continuous effort to expand business and enhance profitability, the Group will have a solid foundation for future development and its long-term value will continue to show and catch eyes.
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