The Group is authorised, through the Contract, to launch and develop its offline sports lottery new retail business by installing terminals in partnering stores in Shandong, including shops of the convenience store chain Jiajiayue ("家家悅"). According to the standards prescribed by the Shandong Sports Lottery Centre, the Group is also permitted to conduct marketing and sports lottery sales to online users of the Shandong Sports Lottery Centre. In other words, the Group has been granted permission by the Ministry of Finance of China to launch the online mobile sports lottery business in Shandong, which is of great significance to the Group's strategic development plan.
The Company has already begun to accelerate the implementation of the business. The Company will initially commence trial of the business in seven intelligent franchise stores situated in Weihai, Shandong. It is expected that the renovation work and relevant installation of the sports lottery terminals will be completed in November 2019. The operation of the business and commence subsequently, and the online and offline marketing of Shandong lottery sales will begin simultaneously.
Earlier in the year, the Company announced that it has commenced commercial operation of its offline sports lottery new retail business. It has already signed with large convenience store chains such as 7-Eleven in Guangdong, Bianlifeng ("便利蜂") and Jiajiayue to install sports lottery terminals in intelligent franchise stores at over 5,000 locations all over China. At present, the Company has already obtained business operation approvals in five provinces and municipal cities in China, namely Beijing, Tianjin, Shandong, Chongqing and Guangdong, and business trials have commenced in over 100 intelligent franchise stores. The newly signed Shandong Province is officially approved and licensed by the Ministry of Finance of China to carry out the mobile sports lottery sales business. The launch of the business marks a significant breakthrough and holds considerable growth potential for the Company.
In 2015, the government suspended Internet lottery sales for the fifth time, which led to a slump for the whole Chinese Internet lottery industry. Yet, Shandong and Hainan became the only two provinces in the entire country that are permitted by the Ministry of Finance to conduct sales of sports lottery through the mobile network. Shandong is a large provincial market in terms of Chinese sports lottery sales. In 2018, its sports lottery revenue reached RMB25.2 billion, which ranked second among all provinces in the country. In comparison, the sports lottery revenue of Hainan in the same year was only RMB1.6 billion. Thus, it is clear that Shandong plays a pivotal role in the sports lottery sales business, which also reflects the potential scale of the online lottery business. The Group is privileged with its existing resources, including its cooperation with large convenience store enterprises such as Jiajiayue in Shandong Province to install sports lottery terminals, as well as its online user base of over 200 million people accumulated through Crazy Recommendation ("瘋狂紅單"), Lottery 365 ("彩票365") and China Soccer Lottery ("中國足彩網") and other platforms. Coupled with the permission to launch the online mobile business in Shandong, the Group can truly actualise a closed-loop servicing ecosystem for online and offline users.
Dr. ZHANG Lijun, Chairman and Executive Director of V1 Group Limited, said, "As more intelligent lottery terminals are installed in chain stores across the country, we can further expand our offline lottery user base through a low cost, wide coverage business model, thus increasing our income from lottery sales. We believe that with our devotion in the sports lottery new retail business, we will be able to replicate our past glory in the lottery business, and thereby leading China's sports lottery industry to a new pinnacle!"
The Chinese lottery market is a huge and rapidly growing market. In 2018, China's lottery sales revenue was over RMB500 billion, which was second only to the United States in the world. According to a research conducted in 2016, US citizens spent up to RMB1,700 on average, whereas the Chinese people spent only RMB280 on average. There is still great potential to the Chinese market. V1 Group has been cultivating China's lottery industry for many years. Since its entrance into the lottery sales business in 2009, it has been developing paperless lottery sales operations and has earned numerous achievements along the way. The continued maintenance and expansion of its online lottery user base allowed the Group to develop its sports lottery new retail business swiftly and smoothly. The Group's Lottery 365 app was the first mobile customer terminal to reach more than 100 million downloads in China; the China Soccer Lottery website has been in operation for over 18 years and is the long-term no.1 website on Baidu's search engine when users search for soccer lottery. The recently developed Crazy Recommendation app is the Group's new star product; it covers over 100 million sports platforms users and lottery players through its expert recommendations and paid knowledge services, of which many were also users of Crazy Sports' multiple sports gaming platforms. V1 Group has always led the development of China's lottery industry through continued devotion and innovation.
About V1 Group Limited
Founded in 2005, V1 Group Limited became a listed company on the Main Board of the Hong Kong Stock Exchange in 2006, and is the first China online video company to be listed in Hong Kong. The Group has a "Video+" business focus. Supported by 5G technology, it aims to build an ecosystem around news video community, sports video community and video new retail. In 2016, V1 Group successfully transformed from a new media enterprise into an internet-based new economy entity. Leveraging on its diverse business covering the media, connected living, internet financing, advanced internet technology as well as other sectors, the Group has become one of the top 100 internet companies in China. the Company made a full acquisition of Fengkuang Tiyu ("Crazy Sport") in 2018 to accelerate the construction of its "Video+" sports community business model, creating a strong overall revenue growth momentum for the Group.
For more information, please visit ir.v1group.com.hk.