ReadCook

不知道為啥會有這篇，要看中文請用翻譯軟體吧

Estore Corporation 4304(TW) had grown via ASP services aimed at eCommerce companies. These form the current core “Systems Business”. However, growth in ASP operations for EC has slowed due to the increasing number of new entrants. In light of such circumstances, Estore is in the midst of shifting its business focus for future growth from ASP operations to the Web marketing (called “Marketing Business” as a business segment by the Company, including consulting on attracting customers and improving rates of purchase as well as agency (services.

Estore’s Marketing Business will not go head-to-head with major specialist advertising agencies, but rather seek to establish a business model unique to Estore in terms of factors such as operational scale and efficiency. Specifically, its approach is to have mid-tier companies with annual sales between \100mn to 10bn as its target customer segment, and identify the best media and publication methods that will obtain the optimal results via a method of trial and error, determining coverage companies for each data scientist (person in charge. At present, Estore is still at the upfront investment stage, however, the anticipated values for potential operating profit margins are at the highest 15 to 20%. An important factor is that the success of the Marketing Business will be linked directly to synergies produced with the Systems Business. In other words, there is the potential for Estore’s profit margins to change significantly when the Marketing Business is launched.

It is expected that FY3/15 operating profit will decline for a second consecutive period to \459mn (-16.6% y-o-y. The reason for this, as noted above, is due to upfront investment in the Marketing Business. In the Systems Business, which is the current core business, the trend for an increase in both sales and earnings through commission income that is linked to traded value is being established, and our assessment is that there is an underlying improvement in Estore’s actual earnings capacity. We feel that this year’s results with a decline in earnings are already reflected in the share price, and that going forward, if the state of progress in the Marketing Business becomes clear there will be a re-evaluation of Estore’s share price.

◆Corporate Profile

Flagship operations in comprehensive support services for online shops

(1 Company History

Estore was established in February 1999. Initially, it started by providing the shopping cart service “storetool” and the “Siteserve” rental server. Subsequently, the Company entered into commercial sales alliances with, among others, USEN Corp. 4842(TW) , So-net (then called Sony Communication Network Corp., the GMO Internet Group 9449(TW) (then called Global Media Online, and expanded its operations. Following that the Company redesigned its service content, formed more alliances, also entering into commercial alliances in 2005 with Yahoo 4689(TW) and Kakaku.com 2371(TW) . Also, from a services perspective, as well as evolving and developing storetool and Siteserve, in 2006 it began offering Shopserve, a comprehensive eCommerce support service, which is now its core business. Estore has consolidated as a subsidiary Precision Marketing Inc. 2011(TW) , launched the product search site Shoppingfeed as well as redesigning it as PARK.

◆A 2-pronged operating structure with the Systems Business & the Marketing Business

(2 Business Overview

Estore currently has a 2-pronged business structure with a Systems Business and a Marketing Business. The Systems Business is a cloud ASP service that enables eCommerce, called Shopserve. In addition to charging from contracted customers a monthly levy as a shopping cart and server systems usage fee, the business model receives settlement and other fees as a fixed percentage of sales. The monthly levy works on a flat rate basis and, while stable, revenues do not increase in the absence of an increase in contracted customer numbers. However, in an increasingly competitive environment gaining new customers is not easy. Accordingly, Estore is, rather than making efforts to increase the number of contracted corporate customers, has steered a course towards sales growth by guiding existing corporate clients to use Estore’s services more and pay more.

The Marketing Business consults and provides agency (services for attracting customers and improving rates of purchase. Precision Marketing provides an Internet marketing service for domains outside the eCommerce field (prospective customer acquisition etc.. From FY3/13 Estore started Internet marketing operations in earnest for eCommerce companies. At present, this eCommerce marketing business is in the red, however, it is currently in the process of making upfront investment, and is positioned as mid-term growth engine. Given that synergies may be expected between the eCommerce marketing business and the Systems Business, this seems to be a rational business strategy.

At present the Systems Business has been firmly established as a source of profits, while the Marketing Business is still recording losses. This is due to the burden from upfront investment for eCommerce advertising operations by the Company itself. While modest, positive earnings have been established at Precision Marketing.

◆The direction & details of the shift in Estore’s business structure

Shift in growth scenarios from “expanding contracted customer numbers” to “increasing contracted customer sales”

(1 Business structure reforms

The core source of earnings for the Company is the income from the comprehensive online shop support service Shopserve. It is an ASP service for sole traders and small- and mid-sized enterprises that have established an online shop and wish to engage in eCommerce, attracting support from a large number (of customers due to its inexpensive usage fee pricing and user friendliness. This business is the Company’s Systems Business (called the EC Business until FY3/13.

However, there are two issues involved with the Systems Business. The first is the issue of low profitability in the commercial alliance agreements (called OEM agreements at Estore which were expanded at the Company’s inception, with the second being the issue of increasing competition due to the proliferation of eCommerce ASP services like Shopserve.

There are two main Shopserve contract formats. One is the proprietary sales channel format for contracts entered into by Estore or small agents. Another is for OEM contracts and those via large agents, with OEM contracts being eECommerce ASP agreements provided under the respective corporate alliance partner’s brand, in a form where Estore is in charge of the backyard. Naturally, OEM contracts have low profitability. Thus Estore has restricted the securing of new OEM contract from FY3/13, and ceased accepting new contracts in FY3/14. During FY3/14 cancellation of the agreements has progressed and at the end of FY3/14 there were already zero contracts, completing its reorganization with contractual counterparties.

Another issue is that of increased competition in eCommerce ASP operations. The business model in eCommerce ASP operations like those of Shopserve involve, in addition to charging from contracted customers a monthly levy as a shopping cart and server systems usage fee, charging settlement and other fees as a fixed percentage of sales. The monthly levy works on a flat rate basis and, while stable, revenues do not increase in the absence of an increase in contracted customer numbers. However, amidst the competitive environment it is not easy to increase contracted customer numbers. Further, from perspectives such as server capacity, capital investment is required in response to increases in contracted customer numbers. Increases in income have to carry additional costs.

Within this framework, Estore made a clear shift in its Systems Business earnings growth scenario from “expanding contracted customer numbers” to “increasing sales from the existing contracted customers”. Through expanding agency commission income obtained from Shopserve’s corporate contracted customers and customer transfer services the Company will expand earnings. The latter measure itself has been undertaken to date via the establishment of the Shoppingfeed product search site in 2006 and the launch of its redesigned version PARK in 2012.

These measures have produced a certain degree of results. As shown in the graph, despite that the number of Shopserve focused customer shops seems to have peaked, total sales from these shops (represented by Traded Value in the graph continues to rise steadily.

Looking at the trend of sales per shop we can clearly understand the direction in which the Company is aiming. Until FY3/11 despite being focused contract customers, the pattern was that sales per shop had stagnated, and were either flat at the early \4mn level or marginally down. However, in FY3/12 when Estore reviewed Shoppingfeed and redesigned it as PARK, as well as revising its policies in respect of contracted corporate customer also from quantity to quality with, from FY3/13, sales per shop having clearly shifted to being on the increase.

The Marketing Business, on which the Company is focusing at present, was originated by these activities. They were not limited to an improvement of the System Business but grew into the Marketing Business, an independent segment to become the next core source of profits. This is the essence of the business structure reforms the Company is promoting.

A focus on Internet advertising at the core of the business structure change

(2 Content & direction of the business structure reforms

The business structure reforms that the Company is promoting currently are, if we were to describe them in one phrase, “becoming a specialist eCommerce Internet advertising agency”. The Internet advertising agent industry already contains market leaders such as Cyberagent, Inc. 4751(TW) , OPT Japan Co., Ltd. 2389(TW) and SEPTENI Holdings Co., Ltd. 4293(TW) . It might be difficult for Estore to enter the market. However, the competitors are not specialized in eCommerce, and in the pursuit of the Company’s services, the domain of Internet advertising business cannot be untouched. For their corporate customers, opening an online shop is not the goal, rather the target is increasing earnings via eCommerce.

Estore’s Marketing Business (formerly the Customer Attraction Business can be traced back to the establishment of Shoppingfeed in 2006. This was a product search site and as per its name was limited to the function to attract customers. The turning point for expansion into Internet advertising was the consolidation of Precise Marketing as a subsidiary in June 2011. Precision Marketing does not concern itself only with eCommerce companies but is engaged in general Internet advertising. Estore labels Precision’s marketing business as “Existing Marketing Business”, distinguishing it internally.

Currently, the core of the business structure shift that Estore is focusing on is Internet advertisement for eCommerce companies handled by Estore itself.. Internally the Company calls this “New Marketing Business”, distinguishing it from Precision Marketing’s “Existing Marketing Business”.

引自--https://tw.stock.yahoo.com/news_content/url/d/a/140821/2/4mva9.html