Data and analytics solutions company, Invigor Group (ASX: IVO) has stated that its previously-announced WeChat agreement with China’s Winning Group Holdings has been upgraded to “unconditional” status with both parties saying they’ve opted to waive the initial three-month pilot period and thereby moving to live deployment of WeChat Pay in South-East Asia.
The removal of the conditionality means the existing agreement is now secured in place for three years which Invigor says will deliver certainty for its ongoing operations in the region.
Furthermore, unconditional status is expected to enable the company to accelerate its growth and investment in building on its partnership with Winning Group across South-East Asia, as well as other international markets that are being pursued by Tencent through Winning Group.
Growing momentum in Asia
The deal adjustment effectively validates the relationship established by Invigor with Winning Group, a global solutions provider for Tencent Holdings, one of China’s largest companies and one of the world’s most valued internet companies.
Currently, Tencent owns WeChat which is one of the most popular payments and social platforms in China with over 1 billion users and 900 million active WeChat Pay customers.
“In the short time since we announced the MoU with Winning Group, we have quickly promoted the merits of our WeChat relationship to leading brands, retailers and mall owners in Singapore and Hong Kong,” said Gary Cohen, CEO of Invigor.
“Our priority now is to consolidate and deploy the significant opportunities we have in this market whilst working on growing our joint capabilities to maximise the unique position we have in this area,” said Mr Cohen.
The deal could become a significant revenue generator for Invigor with the potential emergence of Invigor’s “first significant customer” already on the horizon. The major focus of the deal is to harness one of Asia’s largest and most prominent payment systems, WeChat.
WeChat is a favourited platform used by travelling Chinese tourists and shoppers, using the service to conduct international payments and remittances.
Invigor has said it intends to use its established Asian operations to introduce new merchants to WeChat Pay and therefore move into a position where the emergent data analytics company can generate growing recurring revenues within the fastest growing region in the world.
Together, Invigor and Winning Group intend to take advantage of the increasing number of Chinese tourists – growing each year on the back of continued wealth creation conditions in China that has induced an explosion in the number of middle-class consumers in the country in recent years.
In Hong Kong alone, nearly $60 billion a year is spent by tourists mainly from China.
Invigor’s agreement reinforces its gradual move to a transactional-based model where it will make revenue on the sales from merchants, advertising revenue from promotions and most importantly, from revenue with the integration of Invigor’s Loyalty solution.
Following today’s update, Invigor says that a pipeline of potential deployments “continues to build” and that the duo expects to announce their first revenue-generating agreement with a “recognised global brand group” that has a large retail presence across South-East Asia, in the coming weeks.
According to the emergent data analytics company, it will earn a percentage of sales revenue from the merchants using WeChat Pay, which the company introduces as part of the deal.