Yeahka Limited, a leading payment-based technology platform in China, announced today that it has entered into an investment agreement with Dingding Cultural Tourism (Chengdu) Co., Ltd. (the parent company of Qianqianhui, “Qianqianhui“) and other participating parties, to invest RMB100 million as registered capital and capital reserve of Qianqianhui. After the acquisition, Yeahka will hold 60% of the enlarged share capital of Qianqianhui.
Dingding Cultural Tourism (Chengdu) Co., Ltd. was established in May 2020. Through the brand of Qianqianhui, it has been principally engaged in providing in-store e-commerce services for food, tourism and the related businesses, and has achieved rapid growth since its establishment. As of October 31, 2021, Qianqianhui has accumulated over 6 million paying customers, with a peak monthly gross merchandise value (“GMV”) of over RMB93 million. The founding team of Qianqianhui has many years of startup experience in the in-store e-commerce industry, especially in product innovation and channel development.
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According to Yeahka’s 2021 interim report, the Company started trial operation of its in-store e-commerce business in the second half of 2020, to help merchants improve interaction with consumers, enabling consumers to enjoy more local lifestyles discounts. As of the first half of 2021, Yeahka’s in-store e-commerce business has served nearly 10,000 local merchants nationwide, while the number of paid consumers has exceeded 1.42 million, platform GMV has exceeded RMB71 million, and overall revenue was almost RMB45 million.
According to the announcement of the agreement, the expected synergies that could be brought by Qianqianhui include the following:
1) Ability to provide quality packages. Qianqianhui has extensive supply chain development capabilities across China. Its business has covered over 200 cities as of October 31, 2021, which will assist Yeahka’s in-store e-commerce business to accelerate expansion of SKU coverage.
2) Enormous sales network based on WeChat. As of October 31, 2021, Qianqianhui has more than 3 million registered community leaders on WeChat; Yeahka can sell through their network of relationships. In addition, the total number of followers of Qianqianhui’s WeChat public accounts reached approximately 8 million as of October 31, 2021. Its enormous sales network can help Yeahka accumulate and manage consumers through various channels, from platforms including WeChat public accounts, WeChat mini program and mobile applications.
3) New media traffic operation capabilities based on Douyin. Qianqianhui’s GMV generated from short video production and live broadcasting has exceeded RMB100 million for the four months from July to October, 2021. Yeahka can fully integrate its precision marketing capabilities and Qianqianhui’s strengths in influencer management, which will significantly enhance consumer engagement on Douyin’s online platform.
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Mr. Luke Liu, Chairman of the Board, Chief Executive Officer and Executive Director of the Company, said, “The equity acquisition of Qianqianhui can facilitate healthy and rapid development of Yeahka’s in-store e-commerce business, and create huge synergies with businesses including payments and SaaS digital solutions. Qianqianhui can help to optimize the in-store e-commerce business matrix with its strong supply chain, selling and channel operation capabilities, which will enhance interconnection between the brands, traffic and technologies and our existing businesses. Qianqianhui’s core team’s substantial operational and startup experience in in-store e-commerce will enhance the overall capabilities of that of Yeahka. Going forward, in-store e-commerce business will continue to empower merchants and bring more favorable, convenient and higher-quality services to consumers.
In the announcement, Yeahka has also provided an update on the operations of its payment business. For the nine months ended September 30, 2021, the Company’s gross payment volume has reached to approximately RMB1.56 trillion, and the number of active payment service merchants has reached to approximately 6.27 million. As user traffic in its ecosystem continues to grow, Yeahka expects that the fee rate in the next 12 months will remain relatively stable, and the commissions to be paid to distribution channels will decrease steadily.