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Moxian Inc (MOXC) RSS Feed

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Moxian, Inc. (NASDAQ: MOXC) provides an 'online-to-offline' (O2O) commerce platform, Moxian, to connect businesses with consumers. The Moxian User App for consumers allows consumers to take advantage of coupons rewards and social networking. For businesses, they are equipped with the Moxian Business App that allows them to create a profile, communicate with customers, or manage special offers and advertising.

Mobile devices are changing the intersection of online and offline consumer experiences. In China, where smartphones and advanced cellular networks have achieved the highest penetration rates in the world, O2O strategies have quickly taken root. According to VentureBeat, a media resource on digital commerce, China is the clear world leader in O2O, with sales related to this type of platform growing at 25% per year.

O2O strategies are particularly suitable for consumer goods such as food and beverage, personal services such as beauty salons and fitness, or entertainment such as movies and concerts. While it is possible to find and order these products and services online, consumption is entirely offline and in the real world. The ability to leverage an O2O platform for exposure to interested consumers could be quite appealing. This is true even more for merchants in China metropolitan areas, where congestion frustrates both merchants and consumers.

Accordingly, Moxian is targeting small-size to medium-size businesses in the largest metropolitan areas in China. The company launched the Moxian platform first in Shenzhen and Beijing, deploying a direct sales team of 26 people with plans to expand to a force of 100 by year-end 2016. Shanghai and Guangzhou are also on Moxian's target list.

 

Investment Highlights

  • Large market opportunity in 'online-to-offline' services to draw customers from websites and mobile app to physical stores in China.
    Growing awareness and interest in online-to-offline strategies where merchants and consumers have already embraced mobile devices.
    Primary target market particularly receptive to social commerce and marketing techniques.
    Value of China's O2O market pegged at $48 billion in the first half of 2017.
    Proven technical capability of platform with successful launch of Moxian User and Moxian Business for consumers and merchants.
    Successful closing of final tranche in $8.2 million private placement of common stock.

 


Business Overview

Moxian (pronounced MOH-SEE-AN) is a social multi-media company leading the way in offline-to-online (O2O) commerce. By bringing together cloud computing, the variety of digital services we know as application programming interfaces or 'apps', and social networking on one platform that is accessible by both desktops and mobile devices, the company is tapping into the very exciting O2O market.

Moxian is a virtual shopping mall and more. The company provides an online forum or marketplace where merchants can be introduced to consumers. The merchant sets up a virtual storefront on the Moxian platform and it can sell from there or direct customers to his brick-and-mortar store.

Moxian's two social commerce platforms, Moxian User App and Moxian Business App, are available in mainland China, Hong Kong and Malaysia. Since the beta launch of the Moxian 1.0 platform in June 2013, Moxian has accumulated over 300,000 consumers and 31,600 merchants in its network in the first markets in Malaysia and China. The proprietary platform called Moxian is currently accessible on mobile devices through an app.

Moxian offers a powerful mix of the old and the new. It's like a medieval trade fair filled with jugglers and other entertainments, but harnesses the power of social influence, which is a striking feature of Chinese society. Moxian provides the merchant with valuable business intelligence because of its number crunching capacity.

 


Moxian Services


Moxian's range of services is bundled into two products: Moxian User App and Moxian Business App, both of which are accessible from desktop and mobile.

Moxian User App provides chat and personal moments, interest groups and communities, search and find, nearby deals and rewards, In-App Shopping Mall, entertainment and games, discounts and deals, commerce and e-wallet, and loyalty rewards.

Moxian Business App offers a merchant promo page, shake and win promotions, gifts and voucher tools, event management tools, commerce and e-wallet, interest group management tools, merchant management tools, loyalty programs, advertising and sponsorship and big data business analytics.

The deployment of the Moxian Mobile App is an important aspect of Moxian's strategy. In October 2013, Version 1.0 was released for beta testing in China and Malaysia. As is happening in much of the rest of the world, mobile devices such as smartphones and tablets are proliferating. Their use in making online purchases is, therefore, increasing as online purchasing, in general, continues to grow. As the availability of debit and credit cards in China has increased, so has online purchasing.

Management attributes the popularity of China's social media giant WeChat, called Weixin in China, with fostering the use of bank and credit cards. Users of WeChat, similar to WhatsApp in the U.S., have sought bank cards to monetize rewards offered by the text and messaging service.

 


Market Opportunity


Despite the much heralded advent of e-commerce with the attendant hype over special shopping days like 'Single's Day' in China and 'Black Friday' in the U.S., the predicted demise of brick and mortar stores has not materialized. According to eMarketer, an industry research firm, only about 7% of retail transactions around the world take place online. Industry analysts at eMarketer are predicting that online penetration of retail activity will increase to 9% by the year 2018.

The fact of the matter is that some services require human interaction that cannot be transferred to the virtual world. This reality is creating the opportunity for online-to-offline platform providers like Moxian. The O2O tactics shown in the column on the right are beginning to deliver credible results for local as well as national or even international brands. Anecdotal evidence suggests it is the unique ability of O2O platforms to create a seamless interaction between vendors and customers that is resonating with local shoppers. Vendors are also finding that O2O creates enough efficiency in customer acquisition and retention to justify the added expense of O2O platform services.

At the foundation of O2O is the accumulation of data about consumer behavior and preferences. Armed with details about their customer, brand owners are in a better position to create a smooth path to making a purchase for the customer.

Granted there are limitations to O2O success. Wireless transmissions, location services and shopper beacons (limited to iOS devices) all require the consumer to take action and 'opt in' to participate. Google is addressing this problem with its beacon-like technology called Eddystone that is supported on both Android and iOS devices. Eddystone can be updated by Google directly and requires no consumer action. Nonetheless, O2O appears poised to capture a significant share of the $2.4 trillion global retail market. Even the 200 basis point increase in e-commerce represents $48 billion in retail value, for which vendors are keen to gain a competitive edge.

Shenzhen is China's first Special Economic Zone

Moxian has an office in Shenzhen on the Chinese mainland near Hong Kong. Shenzhen is a bright star in the Chinese commercial sky. Think of it as China's Silicon Valley. In 1980, China's first Special Economic Zone (SEZ) was created in Shenzhen. Since then, the city has become a laboratory of ideas and a hotbed of commercial activity to the extent that it has been dubbed China's Silicon Valley. In an article entitled, Hacking Shenzhen, The Economist newspaper wrote that Shenzhen 'is the world capital of electronics: most of the planet's digital devices are assembled in factories in and around the city.' The same Economist piece stated that 'Shenzhen is also packed with all kinds of suppliers and service providers that can make life easier for hardware startups. Having a new circuit board made there takes days, not weeks as it does in America…'

Moxian's Platform Strategy for Success

Moxian perfected and tested its O2O platform in Asian markets and is homing in on the largest metropolitan areas in China. The company earned modest revenue during the development and testing phase and appears poised to experience a dramatic increase in revenue from merchant subscriptions as the company opens direct sales offices in Shenzhen, Beijing, Shanghai and Guangzhou in 2016.

An initial sales force of 20 people was deployed in Shenzhen, China in the first months of calendar year 2016. A second sales office was opened in Beijing. Management has set a goal of deploying as many as 100 sales people in the two cities by the end of calendar year 2016.

The company has staged training for its sales force and is supporting the marketing effort with a mix of collateral material and advertising.

Moxian may also build distribution partnerships with third parties that have existing relationships with merchants. For example, supply chain service providers typically have very strong relationships with their customers that could be leveraged to sign up merchants.

Revenue is expect to ramp as the number of merchants and consumers escalates. Moxian will receive fees from paid merchant accounts and value-added services, advertising and the sale of consumer data. We expect a somewhat slow rate of growth in the initial months of deployment in Shenzhen and Beijing, with an acceleration in adoption rates near the end of the current year or the beginning of 2017. Initial efforts have begun to extend operations into Shanghai and Guangzhou. We expect these cities and others to provide the backbone for growth in fiscal years 2017 and 2018.

Marketing Tactics

To promote its innovative online-to-offline (O2O) commerce platform at this stage, Moxian is using some traditional marketing techniques. A cadre of local sales representatives will be deployed in high-priority communities to spread the word about Moxian to merchants. Typical merchant participants are in the food, beverage, beauty and healthcare sectors. Merchants can sign up for a free account that will give them an on-line 'do it yourself' space. A monthly fee allows merchants to benefit from the full effect of social media, with basic access averaging $100 per month. Based on data from the beta and first commercial launches, management believes that approximately 10% of merchants that sign-up for the Moxian 1.0 platform will become paying participants. To accumulate the first consumers in each target market, the company is using a low-cost approach based on affinity groups. Residential groups, sports teams, school affiliations and other affinity groups are offered the opportunity to set up, at no charge, a sharing and communications portal on the platform for their interest group. Participants are then exposed to advertising as well as special offers by merchant members.

Outlook

Moxian has made great strides toward commercializing its e-commerce platform featuring online-to-offline technologies. The company completed de¬velopment of the Moxian Merchant and User apps in late 2015 and began full-scale pro¬motion in early 2016. The launch paves the way for a ramp in revenue before the end of fiscal year 2016.

More importantly, manage¬ment has made progress in burnishing the balance sheet. A private placement of com¬mon stock was completed at $1.00 per share and a portion of outstanding related party debt was paid down. Addition¬ally, the Company reduced the number of shares outstanding through retirement of insider shares. A 1-for-2 reverse stock split helps pave the way for an up-listing to a major stock exchange and the suc¬cessful completion of a public offering of common stock.

 


Management

Moxian's management team has more than 100 years of combined experience in a variety of pertinent endeavors, including management of private and public enterprise, multi-national organizations, quality, engineering and procurement, finance, marketing, communication and more. Together, Moxian's management team is effecting the company's aim to create and lead a personalized social network platform that best fits users and businesses.


James Mengdong Tan - Chairman and Chief Executive Officer

Currently the CEO and director of 8i Capital Limited. More than 20 years of experience managing private and public companies in Asia and USA. Previously worked as chairman and CEO of Vashion Group (SGX listed); executive director and CEO, Vantage Corporation Limited; and director of Pacific Internet Ltd.

Nicolas Lin Kuan Liang - Corporate Advisor

Currently working for 8i Capital Limited. Previously worked at Chance Investment Inc. and FM Holdings Limited.

Dr. Ng Kek Wee - Chief Technology Officer

Creator of most successful "cloud service offering" for secure financial institutions and corporations. Received award for "best services orientated architecture" consulting firm. He has a Ph.D. in Services Oriented Architecture (SOA).

Shi Guang Yu - Chief Operation Officer

Previously worked as COO of social commerce company Geile, 365gl.com and COO of e-Commerce company Nidulus, iohuo.com.

Edmund Ooi Boon Hock - Vice President of Creative Marketing

Previously worked at Pico International Worldwide, Cimaron Group USA. Recognized by Asia Television Awards and Singapore Economic Development Board for creative direction and music and use of advance media technology in 3D, AR and VR. Produced and directed SEA Games Opening and Closing Ceremonies.

Clarence Luo - Vice President, Product Development

Previously served as senior product manager for Global Services, Nokia Siemens Networks; and as senior product manager for Motorola Global Services.

 


Moxian, Inc.
Room 1301, 13/F
Wing Tuck Commercial Centre
177-183 Wing Lok Street
Sheng Wan, Hong Kong
www.IR.Moxian.com
IR@Moxian.com

 

 

Please see disclaimer on the NetworkNewsWire website: https://www.networknewswire.com/disclaimer/

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