China Shun Ke Long Reaches Cooperation Agreement with Hengli To Advance Into Cross-Border e-Commerce

China Shun Ke Long, a supermarket chain store operator in Guangdong province, entered into a cooperation agreement with Hengli Limited, the wholly-owned subsidiary of Foshan Shunde Shente Trading Limited. The Group will sell cross-border goods, general goods and imported goods through the e-commerce platform “Hellogou” (www.hellogou.com), and the retail outlets of Hengli, advancing into the cross-border sales market.

Pursuant to the agreement, the Group agreed to sell cross-border goods, general goods and imported goods through “Hellogou” and the retail outlets of Hengli. In addition, the Group agreed to provide various advisory services to Hengli, including to (i) look for new vendors for Hellogou and franchisees for its retail outlet; (ii) promote “Hellogou”; (iii) monitor the vendor portfolio and product mix of “Hellogou”; and (iv) provide training to the staff of Hengli Limited. With the duration of agreement of 5 years, the Group shall pay 2% commission to Hengli for those goods sold through “Hellogou”, and Hengli shall pay advisory fee equivalent to 70% of its revenue to the Group.

“Hellogou” obtained the approval from Guangzhou Custom Bureau to operate cross-border online sale of goods and the approval from Guangdong Telecommunication Management Bureau to run value-added services online, which made “Hellogou” different from other ordinary e-commerce platforms. Hengli also had set up counters in 10 retail outlets of the Group to promote its “Hellogou” and display samples of oversea products. Customers could access “Hellogou” to complete the transaction online by using their mobile phones to scan the “Quick Respond Code” on the price tags of the samples of overseas products, and the goods will be delivered to the customers directly either from overseas or custom controlled warehouses.

Mr. LAO Songsheng, Chairman and Executive Director of the Group, stated, “With a strong foothold in the third and fourth-tier cities in Guangdong province of the PRC, SKL possesses in-depth knowledge in the local market. In recent years, the Group has been committed to developing online-to-offline (O2O) retail business and accumulated extensive experience. With Chinese customers’ increasing demand for high-quality imported food and goods, the Group is optimistic towards the cross-border shopping industry. As we reached the agreement with Hengli, at a relatively low commission rate, we could sell high-quality fresh food and other goods through ‘Hellogou’, bringing consumers a wide range of cross-border goods. In the future, the Group will continue to focus on the development of O2O business in response to market trends. We will also enhance the operating platform to improve efficiency and drive revenue growth for the Group.”