DATA is a core part of MCOM Holdings Bhd’s business. Unlike most SMEs, chief executive officer Ho Kim Hun understands the importance of keeping up with technological trends and has invested in data analytics earlier on.
This mindset has helped the company evolve from just a content provider into a mobile advertising solutions provider.
The company, established in 2005, started off by developing content such as subscription-based games for mobile users when Ho saw a need for a mobile payment solution to enable users to execute payments for their content subscriptions.
“In 2006, we launched our mobile payment solution,” he says.
However, the rising popularity of smartphones during that period drew a dizzying amount of mobile content into the market. Most of these were made available to users for free, and the bulk of them were of poor quality, notes Ho.
“The industry grew because of smartphones. But the content industry started declining. So we have to change our model. We changed into a platform business since we already had a mobile solution platform. And it started to boom. Platforms have a longer lifecycle than content.
“But at that time, we saw that there weren’t many platforms to support mobile advertisements.
“So in 2015, we came up with a mobile advertising platform that helps connect mobile advertisers with quality content producers that have the right database or target audience,” he shares.
The move boosted the company’s sales significantly.
MCOM’s profit after tax leapt to RM6.6mil in 2017 from RM129,000 the previous year. Revenue doubled to RM16.8mil from RM7.4mil.
Last year, the company upgraded its mobile advertising platform to a programmatic platform, which focuses more on data analytics and “real-time costing, accuracy and optimisation”.
This, Ho shares, will help the company grow even more.
Additionally, MCOM is planning to move into the e-commerce advertising space, which would give it another growth segment to tap into.
Ho expects strong revenue growth for this year.
“We upgraded our platform and solutions last year. And we will be going more into e-commerce this year, which can give a big boost to revenue. E-commerce has volume so we will see a big jump because of this,” he says.
For the seven-months ended July 31, 2018, its profit after tax was RM1.6mil on the back of RM9.6mil in sales.
Currently, payment solutions contribute about 80% to its revenue, the bulk of which comes from its overseas market, while its mobile advertising platforms make up the remaining 20%. But moving forward, Ho says its mobile advertising platform business will drive growth for the company.
Another growth opportunity for the company will come from Cambodia. In 2016, MCOM secured a 30-year Internet Service Provider licence there to roll out Internet services.
“People think we are diverging from our core of mobile advertisements to an Internet service provider. We are not. The core of this project is not to provide Internet connection. It’s about the database,” says MCOM group general manager David Ng.
“We want to create our own database. Providing free wifi is an effective way to get a database of users. The Cambodia business will serve as a lead generator for us to create our in-house database.
“Cambodia is a booming market. And not a lot of people have tapped into this market’s database yet. So this helps expand our mobile advertising business,” adds Ng.
He also notes that Cambodia’s close relationship with China will help develop the market there.
If its venture in Cambodia is a success, Ng says the project can serve as a model for its ventures into other markets.
MCOM is set for a listing on the LEAP Market to raise funds for its expansion plans.
The listing will involve a placement of 18.85 million shares or 10% of the enlarged share capital at an indicative price of 28 sen per share.
This will raise about RM5.28mil for the company, of which, RM2.9mil or 54.9% will be used as capital expenditure to set up essential facilities to offer wired and wireless Internet services in Cambodia.
Another portion of the funds will be used to increase automation level in the company’s mobile advertising platform and to enhance its mobile advertising solution infrastructure.
Ho says the company will be developing another platform next year for its next phase of growth.
“We are going to do a data management platform, where we can analyse all the data that comes in and match customers more effectively.
“In the future, there will be more and more data coming in. But you’ll need effective data. So a data management platform will have good potential.
“Yes, it’s expensive to develop a platform and it takes a long time. But we want to enhance our products when new technology comes out. But we can’t take too long to develop them. Platforms keep changing. We always need to change. We have to follow the trends to meet market requirements,” says Ho.