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Under terms of the agreement, Payscout will provide global payment services for China’s largest flash sale website.
(Los Angeles, CA) December 8, 2015—Payscout, Inc., a leading global payment processing provider, has announced an agreement with China’s Vipshop Holdings, under the terms of which Payscout will provide global payment logistics for purchases from worldwide merchants on VIPShop.com, China’s largest flash sale website. Brands enjoying strong sales on VIPShop.com include Nike, Disney, Hanes, and Lee (owned by VF Corp.).
The partnership with Vipshop Holdings was facilitated by Payscout’s presence in China, which the company established several years ago. Payscout has a third-party service provider relationship with China UnionPay, the only domestic bank card organization in the People’s Republic of China, as well as its overseas subsidiary, UnionPay International. Cultural empathy, which is a key component of Payscout’s approach to business, has enabled the company to become a trusted partner for Chinese eCommerce companies looking to expand globally. Vipshop recognized Payscout’s status as a thought leader in the global payment processing industry and it ultimately led to the partnership.
“As a strong advocate of entrepreneurialism and global eCommerce,” said Payscout CEO Cleveland Brown, “we are delighted to establish this relationship with Vipshop Holdings. Vipshop has successfully demonstrated that there is a third eCommerce model that can provide tremendous scale and profitability.”
Vipshop was founded in 2008 by Eric Ya Shen and Arthur Xiaobo Hong to take advantage of the lack of a particular sales model in China, short-term sales on luxury items. The website VIPShop.com, which is by far the largest flash sale site in the country, has approximately 4.9 million cumulative customers and partnerships with over 5,800 domestic and international brands. Vipshop Holdings has been the most highly valued Chinese eCommerce stock for the past two years, and has continued to increase in value despite the recent vagaries of the overall Chinese stock market.
“We are very excited about this agreement,” said Gang Chen, Director of Strategy Division at Vipshop Holdings. “Our goal is to provide great value and a compelling global shopping experience. We believe our partnership with Payscout, Inc. will help make shopping on VIPShop.com as secure, convenient and seamless as possible.”
According to the most recent available figures, the market’s confidence in Vipshop Holdings appears to be well placed. Unaudited second-quarter 2015 results show an increase in total net revenue of 77.6% to RMB9.0 billion ($1.5 billion) from RMB5.1 billion in the prior-year period. Gross profit increased by 78.6%, to RMB437.8 million ($70.6 million) over 2Q2014, and operating margin increased to 4.9% from 2.9%. The company attributed a significant amount of its growth to rapid expansion on the mobile front; according to Vipshop, 76% of its gross merchandise value now comes from mobile devices.
Noting these results, Brown pointed out that global eCommerce is one of the fastest-growing sectors of the global GDP, which is expected to reach $2.4 trillion in 2017. Payscout’s partnership with Vipshop Holdings, he observed, demonstrates that global entrepreneurs need the technology and compliance to successfully conduct global transactions. “Global economic policy and global eCommerce,” Brown said, “are inextricably joined. Policy makers should take note that a fundamental shift to support global eCommerce needs to be addressed in shaping future economic policy decisions.”