Under the epidemic, the digital demand of small and medium-sized micro merchants has increased rapidly year-on-year

Economic Observation Network Hu Qun/Wen "Fortunately, there is a takeaway service now, otherwise it would really have to close." A guy from Huainan, Anhui Province, who opened a beef soup restaurant in Xisanqi, Haidian District, Beijing, said that due to the impact of the epidemic, the dine-in business has not been able to go up for three years, and the takeaway turnover accounts for more than half, and now the store completely relies on takeaway, fortunately, a series of processes from order to cash register have been very skilled. In order to sell more points, he has registered on a number of takeaway platforms, but now he can only barely support it.

Behind the takeaway in the catering industry is digital transformation.

Affected by the new crown pneumonia epidemic, new consumption habits such as contactless self-service ordering have gradually become popular, and the digital transformation of small and medium-sized merchants has accelerated, which has promoted the sustained and rapid growth of merchant solution business.

In recent years, the takeaway business in the catering industry has been cut into services by companies such as Meituan, Lacala and Mobile Card, with Meituan taking takeaway and ordering as the entry point, while Lacala and Mobile Card have empowered the digital transformation of the catering industry with payment services as the entry point.

"The outbreak of the new crown pneumonia epidemic has triggered profound changes in consumption patterns and formats, with the development and landing of digital technologies represented by artificial intelligence, big data, cloud computing, blockchain, etc., the low degree of informatization of merchant operations, financing difficulties, marketing difficulties, high cost of access to IT services are expected to be solved, and the digital operation needs of merchants have entered a stage of rapid growth." Recently, 300773.SZ said in its 2021 annual report.

Currently, La Cala, Transfer Card (9923. HK) and other payment-based merchant digital operation service providers have entered the harvest period of digitalization of small and medium-sized micro businesses. In 2021, Lakala achieved operating income of 6.596 billion yuan, an increase of 18.69% year-on-year, and net profit attributable to shareholders of listed companies was 1.083 billion yuan, an increase of 16% year-on-year. In 2021, the revenue of mobile card was 3.059 billion yuan, an increase of 33.4% year-on-year, and the adjusted net profit was 435 million yuan, an increase of 20.6% year-on-year.

La Cala: Paid services revenue 5.8 billion

In 2021, La Cala's main business is divided into two main categories: payment services and technology services.

According to the annual report, Lacala achieved operating income of 6.596 billion yuan, an increase of 18.69% year-on-year; net profit attributable to the mother was 1.083 billion yuan, an increase of 16.31% year-on-year; basic earnings per share was 1.38 yuan, an increase of 18.97% year-on-year.

In terms of operating income, Lacala Payment Services achieved revenue of 5.807 billion yuan, an increase of 19% year-on-year, of which the payment fee income was 5.42 billion yuan, an increase of 16% year-on-year, the payment service fee income was 387 million yuan, an increase of 94% year-on-year; the total amount of payment transactions was 5.16 trillion yuan, an increase of 17% year-on-year. Science and technology services achieved revenue of 373 million yuan, down 15% year-on-year, and the annual report analysis believes that it is mainly due to the fact that the subsidiary Huiji Tianxia is no longer consolidated, and the income from the integral operation business is no longer included in the consolidated statement.

At present, Lacala's payment business is mainly concentrated in the territory. According to the annual report, in 2021, the domestic payment service fee income will be 387 million yuan, an increase of 94% year-on-year. This is mainly due to the significant increase in the company's new terminal product launch and the increase in the revenue of communication services provided to merchants after the increase in the scale of merchants.

"The promotion of the digital yuan has brought new opportunities for the development of the industry, and the third-party payment market has continued to grow." According to Lacala's annual report, since 2019, Lacala's technical pre-research in the direction of digital yuan, new terminals, payment + SaaS has gradually blossomed: it has taken the lead in completing the system docking with the digital currency research institute of Chinese Minmin Bank and the digital yuan operation bank of ICBC, CCB, Bank of China, Agricultural Bank of China, Bank of Communications, China Merchants Bank, postal savings bank, etc., launched digital RMB aggregate payment, wallet, bracelet and other products, and became Wumart, METRO, MeiLianmei, Chongqing Department Store and other large supermarket department store customers exclusive digital RMB solution service provider. At present, Lakala has cooperated with the governments of 11 pilot cities to complete the issuance of digital yuan red envelopes, and has provided digital yuan services to 1.55 million merchants.

The Economic Observer Network noted that the number of R&D personnel in La Cala decreased from 454 in 2020 to 388, a decrease of 14.54%; the proportion of R&D personnel increased from 12.66% in 2020 to 15.62%; from 2019 to 2021, the R&D investment was 252 million yuan, 256 million yuan and 250 million yuan, and the proportion of R&D investment in operating income was 5.15%, 4.61% and 3.80% respectively.

Mobile Card: Revenue up 33.4%

As a leading technology platform based on payment, Mobile Card connects merchants and consumers through different types of payment services such as QR codes and bank cards, and provides merchant solutions including SaaS digital solutions, precision marketing services and fintech services on this basis to help merchants better manage and drive business growth.

"As the merchant traffic entrance of our business digital ecosystem, the one-stop payment service is the foundation for the construction of the company's business digital ecosystem, providing an important fulcrum for merchant solutions and in-store e-commerce business." In its annual report, the mobile card said that although some regions were affected by the epidemic in 2021 and China's regulatory environment gradually matured, the effective marketing and channel strategy of the mobile card still led to the strong growth of total payment transaction volume and revenue. In 2021, the total payment transaction volume increased significantly by 45.5% year-on-year to RMB2.12 trillion, of which the total payment transaction volume of application-based payment services increased by 59.0% year-on-year, accounting for 60.5% from 55.4% at the end of 2020 to 60.5% at the end of 2021.

According to the financial report, in 2021, the revenue of mobile cards was 3.058 billion yuan, an increase of 33.4% year-on-year; the revenue of one-stop payment services increased by 24.0% year-on-year to 2.268 billion yuan. At the same time, the number of active payment service merchants and consumers reached through the one-stop payment service reached a record high, with about 7.3 million and 945 million respectively, an increase of 32.5% and 46.5% respectively year-on-year.

Mobile cards also maintain a high degree of attention to the digital yuan.

"We believe that the development of digital currencies (DC/EP) will further promote the in-depth cooperation between commercial banks and third-party payment institutions. We actively participate in the planning and design of digital currency technology standards and have completed the deployment of software and hardware capabilities. The annual report of the transfer card shows that it has worked with a number of domestic leading commercial banks to promote the landing of digital yuan in cities including Shenzhen, Beijing, Shanghai and other cities. And use the growing sales network to provide additional innovative payment solutions, and at the same time, through the full penetration of merchants' offline scenes, provide strong merchant-side support for commercial banks to implement the full implementation of digital currency.

Outside of the payment business, mobile cards have found a new second growth curve, and its merchant solutions and local life business are growing rapidly in 2021. Among them, the revenue of merchant solutions that provide digital services for small and medium-sized merchants is 642 million yuan, an increase of 38.5% year-on-year; the in-store e-commerce business is even more huge, with revenue of 148 million yuan, the number of paying consumers is about 5.2 million, the total merchant transaction volume exceeds 398 million yuan, and the total merchant transaction volume of the in-store e-commerce business is expected to reach 2.8 billion to 3.5 billion yuan in 2022.

According to the annual report of the mobile card, R&D expenditure increased by 88.2% from $128 million at the end of 2020 to $240 million at the end of 2021, which the annual report believes is mainly due to the increase in commitment to new business and product development and the increase in the number of employees, partially offset by the reduction in system development, consulting and data verification costs.

At present, the number of small and medium-sized micro merchants in the mainland is large, and the digital operation service market of merchants has broad prospects for development. According to the "Report on the Innovative Development of Small and Medium-sized Enterprises" released by the Third Forum on the Development of Small and Micro Economies, by the end of 2020, the total number of mainland market entities will reach 140 million, the number of small and medium-sized enterprises will account for 95.68%, operating income will account for 62.98%, and total profits will account for 53.46%, and the economic contribution will increase steadily.

According to the forecast of THE RESEARCH Department of CICC, the scale of the offline small and medium-sized business service industry chain is expected to reach 243 billion yuan in 2025, corresponding to a compound annual growth rate of 33% in the next five years, of which the revenue space of each industrial chain segment is 102 billion yuan for mobile payment (42 billion yuan for the acquirer side), 55.9 billion yuan for scene services, 44.4 billion yuan for digital operations, 36.2 billion yuan for financial services, and 4.5 billion yuan for advertising and marketing. The service industry chain of offline small and medium-sized micro businesses is expected to usher in explosive growth.