VGI Further Expands into Retail Business, Remaining Buoyant Despite Sluggish Performance in 2Q 2021/22 Due to COVID
VGI Public Company Limited (“VGI”), the leader in Offline-to-Online (“O2O”) Solutions across multiple platforms announced its 2Q 2021/22 performance today, still reeling from the impact of the COVID-19 pandemic, recording net loss of THB 9mn. However, the Company managed to generate THB 923mn in operating revenue, an increase of 28.7% YoY, thanks to growth of the Rabbit Group and consolidation of Fanslink Communication Company Limited (“Fanslink”).
Commenting on the announcement, Mr. Nelson Leung, CEO of VGI, said, “The Company has been facing tremendous challenges due to the new wave of COVID-19 and its capricious impact, which has led the Government to announce tighter restrictions limiting normal daily activities. This has had a severe impact on our Company, especially our Out-of-Home (“OOH”) segment, which saw its revenue drop by 38.8% YoY to THB 294mn. On the other hand, our digital segment saw its revenue increase by 165.2% YoY to THB 629mn, thanks largely to the growth of the Rabbit Group and 2-month consolidation of Fanslink since August 2021.”
“During this quarter, VGI has further expand into retail business by acquiring 15.0% stake in Jay Mart Public Company Limited (“Jaymart”). Through this strategic partnership, we expect to create new synergies, for instance by offering VGI’s O2O services for Jaymart Group, utilizing BTS spaces for pick-up and service points, and expanding Fanslink’s distribution network across Jaymart and Singer Thailand Public Company Limited’s nationwide network. At the same time, we also hope to learn the know-how from Jaymart’s innovative Fin Tech business,” Mr. Lueng added.
He further noted, “As for the Company’s key business highlight and management outlook, whilst our Advertising business has suffered a huge blow due to the pandemic, we remain firmly committed to constantly improving our marketing performance by fostering more audience engagement through all of VGI’s platforms. Most recently, we have discovered an exciting new trend for OOH, where it has become a popular platform for fan-celebrity interactions, given its effective audience engagement capability surpassing any other media platforms. Moreover, we have launched ‘VGI Hanger’, our latest customer activation tool which enables brands to conveniently engage consumers to sample free products through advertising hangers on BTS trains. Meanwhile, in our Payment segment, Rabbit Card has recently collaborated with Garmin (Thailand) Limited to launch a special edition smartwatch ‘Garmin X Rabbit’, enabling users to pay for their purchases with their smartwatch under the concept ‘Touch and Go’. In turn, this collaboration is expected to help expand the Rabbit network user base, including Rabbit Card holders, which now stands at 14.5mn, increasing 6.3% YoY, and Rabbit Line Pay, which currently has over 9.0mn users, increasing 14.0% YoY. Furthermore, Rabbit Cash Company Limited (“RCash”) has launched a 100% digital lending service platform under the concept ‘Money Rabbolution’ making it easier for Thai consumers to access loans through seamless application process, credit approval and loan disbursement via smartphones all in one go. Recently, RCash has also introduced pilot loan products with Kerry Express (Thailand) Public Company Limited (“KEX”) and Humanica Public Company Limited.”
“Given the increase in the vaccination roll-out rate in Thailand (over 65% of the national population and 90% of Bangkok metropolis having received vaccination as of October 31, 2021), coupled with the decline in the number of deaths, the Government has made an official announcement to reopen the country for the first time since April 2020 and ease travel restrictions starting from 1 November 2021. Fully vaccinated visitors from 63 countries are now exempt from quarantine. As a result, most businesses and activities in the Blue Zone tourist destinations will be able to resume ‘new normal’ operations alongside the resurgence of the tourism and other business sectors.
As for VGI’s business outlook, thanks to the aforementioned positive developments, the prospect is promising. With improvement in its core operations, combined with synergies from new investments in strategic partners, we firmly believe that the Company’s performance will be strengthen and continue to gradually return to pre-COVID level.”
