Another lottery page has been launched:
Alibaba launched a Lottery page in Taobao.com website. You can find winning numbers, locations of lottery stores, favorite winning numbers from the past, ways to earn free lottery tickets, loyalty points for gifts, discount coupons at participating merchants. A lottery page on Alipay site has also been upgraded to be more interactive. These sites can do everything except sell you lottery tickets. It's apparent that Alibaba Group is gearing up for the resumption of Internet Lottery Sales. I know no one else that's doing what Alibaba Group is doing for the lottery space.
John Sun's message to investors at CICCI conference last week was "Internet Lottery Sales will come back. When it does, Alibaba-AGTech will be ready. In the meantime, we are actively developing other businesses in both lottery and gaming in China and abroad."
The significance of a deal with Guangdong Province:
The most significant aspect of this agreement with Guangdong government is the use of Alibaba's physical distribution network to boost lottery ticket sales. China is expected to generate $65bil in sales from lottery this year. The math breaks down like this.
|Expressed in USD|
|Total Lottery Revenue in China||$65,000,000,000|
|Number of lottery stores||300,000|
|Sales per store||$216,667|
|Gross revenue per store (8% commission)||$17,333|
On the average, each lottery store generates $17k gross sales. If Alibaba can set up 10,000 stores, that's $173 Million gross revenue.
Investors have not gotten their head around this one yet, but when AGTech announces a similar arrangement with another big province, investors will begin to picture a nationwide rollout and be able to quantify this opportunity.
Disclosure: I am/we are long BABA. AGTEF.