SHANGHAI, Aug. 27, 2021 /PRNewswire/ -- On August 24, Qeeka Home (01739.HK, operator of Jia.com in China) (the "Company"), a SaaS enabled solution platform serving China's interior design and construction sectors, released its H1 2021 financial results. For the first half year of 2021, the Company's total revenues increased by 66.5% year-over-year to 524 million RMB (approx. US$81 million), while revenue from the SaaS and Extended Services business rose by 38.4% to 309 million RMB. Adjusted net profit attributable to shareholders improved to 20.54 million RMB, up 286.3% year on year.
The solid growth in revenue was attributed to Qeeka Home's implementation of its SaaS strategy, which assisted home improvement and interior design firms in adapting to industry changes and in embracing new industrial forms. The roll-out of the strategy helped the home improvement sector recover, while significantly enhancing the Company's operational efficiency. "Aggressive and effective empowerment initiatives have helped us to increase the amount of business we receive from our active paying merchants and enhance their stickiness, as well as significantly heighten our appeal to the home improvement firms and interior designers that have not yet registered on our platform," said Qeeka Home chairman and CEO Deng Huajin.
Revenue from the main business grew 38.4%, with SaaS services as the core driver
As one of the largest service platforms serving China's home improvement sector, Jia.com continued the roll-out of its SaaS service platform strategy, providing home improvement firms with comprehensive business solutions covering marketing, supply chain procurement and SaaS services, helping them to improve their core competitiveness in terms of marketing, branding and supply chain, to precisely target potential customers, reduce costs and increase efficiency, while empowering them to expand efficiently.
During the first half of 2021, the minor COVID-19 outbreaks in China nevertheless impacted industrial production and people's daily lives. Against this backdrop, the digital transformation of virtually every industry in China became an inevitable "must do". For a long time, the home improvement and interior design sectors, due to their inherent nature, had been characterized by many pain points such as low access threshold, long industry chain, great dependence on offline delivery and difficulties in standardization and transformation. The pandemic hit home improvement firms that had not yet started their digital transformation hard, leaving them struggling or even experiencing negative growth.
Having been a player in the home improvement and interior design sectors for many years, Qeeka Home has collected a massive amount of industry data and practical experience by virtue of having served tens of thousands of firms. This has led Qeeka Home to be a driver in improving the efficiency of the industry by empowering the digital upgrade of the firms. The Company supports across-the-board digital upgrades of home improvement firms covering all chains, providing a practical path for the firms to cope with the COVID-19 crisis and realize rapid transformation.
The interim report shows that Qeeka Home's businesses currently consist of two main segments - SaaS and Extended Service Business as well as Interior Design, Construction and other Business. The SaaS and Extended Service Business segment is further broken down into sub-segments including SaaS, Marketing Services and Supply Chain Service. As the Company's core business, the SaaS and Extended Service Business booked revenue of 309 million RMB for the first half, up 38.4% year-on-year. SaaS subscription fees reached 15.33 million RMB, up 52.5% year-on-year, while marketing revenue rose to 265 million RMB, up 38.8%.
Qeeka Home said that the solid growth was mainly driven by the increase in revenue from the SaaS and Extended Service Business due to the increase in the number of active paying merchants, and by the continuous optimization and adjustment in the Company's internal structure. This has improved the organizational and operational capabilities of the team and resulted in significant cost reduction and efficiency gains. At the end of the first half of 2021, the number of new paying merchants on the platform had climbed to 1,082, with a merchant retention rate of 93%, a testament to the company's sound growth.
With the gradual increase in the industry-wide digitalization rate, Qeeka Home's SaaS-enabled strategy began to serve as the industry's digital infrastructure, providing a one-stop solution to the home improvement firms that need to digitize their marketing, operation and supply chain services. Meanwhile, the strategy also became Qeeka Home's core growth driver.
Active paying merchants increase by 33.8%: improving industrial efficiency through digitalization
China's home improvement and interior design market is valued at some trillion RMB, with demand for home improvement and the outfitting of new homes remaining stable. According to the 2020 China Internet Home Improvement Industry Report published by Fastdata, the overall size of the market in 2020 had reached 2.61 trillion RMB. Despite the market's massive size, the Matthew Effect of accumulated advantage in the industry is obvious. The digitalization rate is low, with only 9.7% of transactions happening online and only 19.2% of the firms having undertaken or in the process of digitalizing. As a result, actively embracing digital transformation has become a consensus across the industry.
As a professional service platform serving the industry, Qeeka Home, by grasping the opportunities brought about by the industry's ongoing digital transformation, has adjusted and optimized its own development logic and service system. The Company has also put further focus on integrated SaaS solutions for home improvement firms based on SaaS subscription services, which are synergistically empowered by marketing services, supply chain procurement and innovative value-added services. In other words, Qeeka Home hopes to use its rich big data and technology-enabled capabilities to help home improvement firms solve the operational inefficiency and frequent inability to truly compete due to the lack of digitalized operations.
Qeeka has assumed a leadership role in the provision of home improvement and interior design SaaS solutions. As for digital marketing, Qeeka Home has not only collected a huge number of sales leads, but also helped home improvement and interior design firms achieve efficient transformation by optimizing big data matching, building a high-quality home improvement content ecosystem, upgrading user protection plans and creating live streaming tools.
In terms of supply chain empowerment, Qeeka Home has joined forces with many high-quality building materials brands in China and abroad, to create a comprehensive supply chain covering main materials, accessories and soft furnishings, helping the firms procure products via digital means, greatly reducing back-end procurement costs and improving procurement efficiency. Enhanced offerings have also become another venue for attracting new customers.
Digital marketing and supply chain empowerment can better help home improvement firms reduce costs and increase efficiency, and Qeeka Home's innovative value-added services can better help these firms improve service quality and establish a good brand image, enhancing their ability to provide superior services. Qeeka Home's special services include the Qijia Bao consumer protection plan and the Merchant Service Integrity Alliance. The Qijia Bao consumer protection plan is so well known across the industry that it is often referred to as the sector's "Alipay" (China's leading merchant payment solutions provider), and has become a standard service that protects the rights and interests of users on the Jia.com platform. The Merchant Service Integrity Alliance requires the firms in the Alliance to meet credible service standards by setting up dynamic labels.
Both the Qijia Bao consumer protection plan and the Merchant Service Integrity Alliance both act as incentives for merchants to strive to provide excellent service process and quality, protecting shoppers' interests. After years of iteration and optimization, all of Qeeka Home's special services have matured and earned good reputations. Qeeka Home empowers merchants with its good brand image and standardized services, which not only strengthens the shoppers' trust in the merchants, but also enhances the merchants' capabilities.
Data shows that the number of active paying merchants on the Jia.com platform increased by 33.8% to 5,667 during the first half of 2021. The merchant loss rate dropped by half while the retention rate was further improved. The 93% retention rate is the result of the merchants' satisfaction with Qeeka Home's services. Home improvement firms that opt for digital transformation are the direct beneficiaries of Qeeka Home's SaaS empowerment strategy, while the improvement in the competitiveness and service quality of the firms will ultimately benefit consumers and do wonders for the user experience.
Qeeka Home plans to continue consolidating its position as the most impactful home improvement SaaS service provider in China, while continuing to expand its partnerships with merchants based on its SaaS strategy, in a move to further improve merchant retention rate, help home improvement firms improve their services and management capabilities, further reduce costs and increase efficiency, and enhance user experience.
About Qeeka Home
Qeeka Home (01739.HK, domestic operator of Jia.com) is one of the largest SaaS enabled solution platforms in Interior Design & Construction (IDC) Industry in China. The company provides marketing service, supply chain service and other innovative value-added services to thousands of IDC service providers through the SaaS platform. Qeeka also operates several well-known IDC brands in China and provides consumers with capital protection and independent inspection services. Qeeka Home was founded in 2007 and listed on the main board of HKSE on 2018.
For more information, please contact:
Qeeka Home CFO
Mr. Leo Kang
Phone: (+86) 021-61740163
E-mail: ir@qeeka.com
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