Momo.com Inc (富邦媒體), the nation’s leading online and TV retailer, is hoping for a better second half of this year, as it waits for new businesses to bear fruit, company chairman Daniel Tsai (蔡明忠) said yesterday.
“The company’s report card last year was not satisfactory, but acceptable. However, the pressure in the first half of this year remains large,” cable TV station USTV quoted Tsai as saying at the company’s annual general meeting in Taipei.
Momo.com, a retail subsidiary of Taiwan Mobile Co (台灣大哥大), operates an online shopping network, a TV home shopping division and a catalog shopping business. It posted record revenue of NT$112.56 billion (US$3.76 billion) last year, up 3 percent from a year earlier.
Photo: CNA
However, revenue in the first quarter fell 1.76 percent year-on-year, or 21.1 percent quarter-on-quarter, to NT$26.41 billion.
Sales in its business-to-customer operations, which accounted for 97 percent of total revenue, dropped 1 percent year-on-year to NT$2.55 billion, the first annual decline in the company’s history.
That came amid weakening momentum for online consumption during the post-COVID-19 pandemic period, as well as fierce competition with local and foreign e-commerce peers, the company said.
The increase in operating expenses dragged down the company’s operating margin to 2.98 percent in the first quarter, down 1.18 percentage points from a year earlier.
Net profit was NT$859.59 million in the quarter, also down 5.5 percent annually, with earnings per share of NT$3.41, company data showed.
As the nation’s e-commerce penetration rate is about 13 percent, much lower than in neighboring South Korea, there is still ample room to develop that business in Taiwan, Tsai said, adding that achieving a 20 percent penetration rate is achievable in the near future.
Faced with aggressive competition from foreign e-commerce operators, including South Korea’s Coupang Corp, Momo.com has teamed up with Meta Platforms Inc to integrate e-commerce and social media platforms and develop a retail media network for advertising.
In addition, the company has introduced a new business-to-business-to-consumer model through its “mo-shop+” platform, which enables third-party sellers to offer products to consumers through the Momo platform. It also operates a live broadcast business and opened a logistics center in Tainan, while constructing another in central Taiwan, as the company aims to expand its operations.
While the new businesses are expected to help improve Momo.com’s gross merchandise value and operating margin in the long term, it would take time for them to make significant contributions in the short term, due to the high initial investment costs and the need for larger internal integration efforts, Tsai said.
Moreover, US President Donald Trump’s trade and tariff policies also create uncertainty in the global marco climate, he said.
“Tariffs ... and the appreciation of the New Taiwan dollar have made consumers more conservative about the economy, making them more cautious about spending,” which have in turn affected the e-commerce business, Tsai was quoted as saying. “Momo faces greater challenges in the second half of the year.”
Shareholders yesterday approved the company’s proposal to distribute a dividend of NT$13.3 per share — which comprises a cash dividend of NT$12.8 and NT$0.5 from capital surplus, representing a payout ratio of 97.15 percent based on earnings per share of NT$13.69 last year.
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