I think once the financing is in place they will.
FingerMotion Provides Supplemental Corporate Update
Press Release | 08/13/2019
NEW YORK, Aug. 13, 2019 (GLOBE NEWSWIRE) -- FingerMotion, Inc. (OTC QB: FNGR), a US FinTech company with mobile payment and recharge platform operations in China, today provided a supplemental corporate update in a letter from its CEO Martin Shen to its shareholders.
To Our Shareholders
The China Unicom Portal Partnership
The China Unicom (NYSE: CHU) deal was an extremely positive step for our company. Because of this agreement, we were able to onboard companies such as Pinduoduo (NASDAQ: PDD), JD.com (NYSE: JD), and Alibaba’s Tmall to our platform. We believe that this agreement validates our business model of targeting top-tiered e-commerce platforms and showcases our capability to handle our e-commerce partner’s significant user base. These e-commerce sites would likely not have allowed us to interface with their platforms unless they were convinced we had the capability to process over a billion transactions per month.
The partnership agreement between FingerMotion and China Unicom allows FingerMotion to have direct access to users for their top-up fulfillment, and also allows FingerMotion to sell any and all mobile phone products available from China Unicom through the China Unicom brand portals. China Unicom will remain responsible for all inventory and fulfilment costs of physical products, meaning FingerMotion will have very limited capital costs in handing all revenues coming through the portals. This partnership allows FingerMotion to share profits with the second largest telecommunications company in China. The expected rollout of the China Unicom portals should begin before November 2019.
The SMS business through China Unicom is now in full operation. While the overall size of the top-up market will continue to grow organically, we believe that growth in the SMS market will accelerate.
In the past, SPAM has been a major problem plaguing the SMS industry as there was an oversaturation of messages that were not being policed. Recently, the government of China instituted a policy of oversight, which curbed and eventually stopped SPAM messages. Since the government essentially reviews all messages before they are sent, SMS in China is now essentially SPAM-free with respect to legitimate users, and we are poised to take advantage of this new landscape.
Our business model relies on clients who regularly send messages to their retail customer base. We buy our messages at bulk wholesale prices, then immediately sell the messages to our retail partners, allowing them to share, in part, in the discounted rates. This allows us to generate revenue and increase our margins with little risk of inventory. Unlike our portal business with China Unicom, we grant our customers 30-day payment terms, so this business requires us to invest in carrying client receivables.
Big Data Insights
Our previous press release mentioned Big Data. Big Data means all the metadata that FingerMotion can aggregate from the massive China Unicom user bases of the top-tiered e-commerce platforms. While we will not own the data, we are responsible for collecting, storing, and securing this data, and we will be given access to analyze and potentially formulate powerful conclusions from the accessed information. Our analytics team has already begun gathering the information. We predict that using Big Data could represent a major growth driver and become a business multiplier for us. However, to ensure adequate development, we predict that we are at least 6 months to a year away from formally introducing this business unit.
We are well aware of the obligations we have to consumers to keep their information private and safe. We will only use data we accumulate with each individual consumer’s permission and we will explain what information we wish to obtain, and how we will use this information to save money for the consumer.
Almost all rapidly growing e-commerce companies need money for marketing. Our need for working capital arises from the structuring of the top-up transactions from e-commerce companies. The e-commerce company top-ups require us to have funds on account with the telecommunications companies. The SMS business is also capital intensive because we need to buy the messages at least 30 days in advance of payment. However, we do not need marketing money to increase our user-base, unlike most FinTech companies, which spend massive amounts of money to capture and retain users. Therefore, we continue to be committed in pursuing financing options.
Corporate Governance and Transparency
We want to reiterate that we are a US company with operations in China. Most of our e-commerce competitors in China, if not all of them, are foreign filers. Therefore, as a US filer, we believe we offer a greater level of transparency and oversight. As a company, we are working to become Sarbanes-Oxley compliant, and we have been actively working to finalize our Corporate Governance and Code of Conduct policies.
In line with future planning, we have hired an in-house investor relations representative to assist in answering investors’ questions. In addition, we plan to update our website and keep the information up-to-date and current. We hope you appreciate our efforts in this regard as we move to establish a better rapport with our investors.
Our focus is on sustainable profitability. Like other e-commerce FinTech companies, we are focused on customer acquisition and growing our Gross Transaction Volume (GTV). But our strategic relationships also give us unprecedented access to users and the ability to sell a wide array of products and services to this expansive user base. We believe our inflection point to profitability is only months away, and we hope that our investors appreciate the progress we have made this year and can see the future direction of our company as we do.
CEO, FingerMotion Inc.