Youzoo to be listed on SGX after reverse takeover

Youzoo to be listed on SGX after reverse takeover

Six-year-old e-commerce social network Youzoo will be listed on the Singapore Exchange when it undertakes a reverse takeover of Contel Corporation.

The two companies signed a framework agreement on Jan 2 this year to facilitate the negotiation and finalisation of this deal.

Youzoo's executive chairman Thomas Zilliacus, 59, is going to the market to raise extra funds it needs to expand its business.

The company, which has millions of customers in more than 160 countries, chalked up a net profit of about $10 million on revenues of about $35 million last year.

This was a marked improvement over the $3.5 million profit on revenue of $25 million in 2011.

Youzoo's success is due to its hybrid strategy of an e-commerce store cum social networking service.

Said Mr Zilliacus: "Companies need to engage their customers and fans. But they are doing it for Facebook. They can't monetise all the 'likes' they get from them."

It is Facebook, he said, which ends up monetising those customers for advertising.

"The story is different when a company has its own social network. It can directly engage its customers and fans, tell them what is happening. Then you link a store to the social network and you tell your customers that you can shop there."

Youzoo creates the social networking site and online store for companies.

"This is very powerful because a vast majority of Internet users today trust their social network. So if someone in the social network recommends a product, it is likely to be picked up by others."

IAHGames, the online video gaming company, is a Youzoo customer, said Mr Zilliacus.

The IAHGames social network will let it offer the latest gaming news to its 37 million gamers currently registered and cross-sell games and digital game assets to them.

"We're in talks with another 200 customers today including publishing companies as well as football and basketball clubs throughout the world. Our pipeline is going to be quite full."

Youzoo will have different vertical industries like entertainment, lifestyle, travel and music. It will also be able to add new segments such as age groups.

The company, which has only 25 people in its Beach Road office, is able to accomplish so much because it has designed the basic e-commerce social network site.

Outside of Singapore, it works with franchisees who undertake the marketing of the site.

Youzoo charges each francisee a licence fee and takes a cut from each transaction undertaken at the online store.

Mr Zilliacus believes profit will grow faster than revenue because of the franchise model.

"Franchisees pay us a licence fee and that is sheer profit. We're going from one franchisee per market to appointment franchisees for vertical industries such as golf and football."

Youzoo wants to optimise its website for use on mobile devices. It is also working on a smart TV app.

Its social networks are also localised into various languages including Arabic, Thai and Tagalog.

Mr Zilliacus, a Finn national with Singapore permanent residency, came to Singapore in the late 1980s as chief executive of Nokia in Asia. He left the company in 1993 when he saw the potential of the mobile business.

His company Mobile Futureworks is the largest shareholder of Youzoo. He counts Mr Koh Boon Hwee, former chairman of DBS Bank and Singapore Airlines, and Mr Sven-Christer Nilsson, former chief executive of Ericsson, as among his board of advisers.

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