BEIJING, Aug. 31, 2016 (GLOBE NEWSWIRE) -- Wowo Limited (the “Company”) (NASDAQ:JMU), a leading B2B online e-commerce platform that provides integrated services to suppliers and customers in the foodservice industry in China, today announced that the Company is planning a supply chain finance company (“the finance company”) and has already recruited a team of talent to develop the business and begin trial operations.
The supply chain finance company will serve suppliers and purchasers on JM Wowo’s online marketplace by providing them orders factoring for accounts receivables and credit granting service on the platform. To better serve JM Wowo’s clients, the finance company will provide financing and leasing services to international source suppliers who make large commodity transactions on JM Wowo's online marketplace or supply large equipment to JM Wowo customers. For these corporate clients, the finance company will also connect them with banks for commercial paper, as well as provide some customized financial services for supply chain solutions.
The initiation and development of the supply chain finance business will not only equip JM Wowo’s online marketplace with better transaction service and user experience, but also contribute significantly to JM Wowo’s revenues and profit from this new business sector. Supply chain finance has a favorable market outlook in China and JM Wowo provides the following referable market information:
1. Account Receivables. According to China National Bureau of Statistics, net account receivables from China’s above-designated-size industrial enterprises increased to RMB10.52 trillion in 2014 from less than RMB0.3 trillion in 2005. Net account receivables increased 3.55 times over ten years with an annual compound growth rate of 15%. As an essential form of supply chain finance, the increasing scale of account receivables provides a solid ground for the development of supply chain finance.
2. Financing and Leasing. According to Wind Info and China Merchants Securities, the balance of financial leasing exceeded RMB3 trillion in 2014. Among that, the balance of financial leasing contracts has the largest scale, which accounted for 41% of the total leasing contract. The rapid development of financial leasing is favorable to companies who need specialized equipment on a large scale and is also meaningful to the growth of supply chain finance.
3. Commercial Paper. According to Wind Info, PBOC and China Merchants Securities, from 2009 to 2015, China’s issuance of commercial paper has increased steadily. In 2014, the amount of commercial paper issued exceeded RMB20 trillion. In the first half of 2015, the amount of commercial paper issued reached to RMB11 trillion. As commercial paper is an important form of supply chain business, China’s supply chain finance development is associated closely with China’s commercial paper issuance.
Lastly, driven by the development of accounts receivables, commercial paper and financing and leasing, China’s supply chain finance is showing rapid growth trend. According to industry reports from China Advance Industrial Research Institute, by 2020, the market scale of China's supply chain finance will increase to RMB14.98 trillion.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “aim”, “anticipate”, “believe”, “estimate”, “expect”, “going forward”, “intend”, “ought to”, “plan”, “project”, “potential”, “seek”, “may”, “might”, “can”, “could”, “will”, “would”, “shall”, “should”, “is likely to” and the negative form of these words and other similar expressions. Among other things, statements that are not historical facts, including statements about JM Wowo’s beliefs and expectations, the business outlook and quotations from management in this announcement, as well as JM Wowo’s strategic and operational plans, are or contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: The general economic and business conditions in China may deteriorate. The growth of Internet and mobile user population in China might not be as strong as expected. JM Wowo’s plan to enhance customer experience, upgrade infrastructure and increase service offerings might not be well received. JM Wowo might not be able to implement all of its strategic plans as expected. Competition in China may intensify further. All information provided in this press release is as of the date of this press release and are based on assumptions that we believe to be reasonable as of this date, and JM Wowo does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
About JM Wowo Limited
Wowo Limited currently operates China’s leading B2B online e-commerce platform that provides integrated services to suppliers and customers in the foodservice industry. With the help of Internet and cloud technologies, the Company has the vision to reshape the procurement and distribution pattern and build a fair business ecosystem in the catering industry in China. The Company is further promoting the use of its platform for small- and medium-sized restaurants and restaurant chains in China.
Through cooperation with national and local industry associations and reputable restaurant groups across China, the Company has formed a leading industrial alliance and has great resource leverage in China’s catering industry. The Company works closely with suppliers and customers in the catering industry, providing one-stop procurement services, as well as other value-added services.