User Engagement and Growth - As of December 31, 2021, the total downloads of the CHEERS App reached approximately 271 million, up from 169 million as of December 31, 2020, representing a growth of 60.7%[315] - Monthly Active Users (MAUs) increased to 47.6 million as of December 31, 2021, compared to 37.7 million as of December 31, 2020, reflecting a growth of 26.3%[316] - The CHEERS App integrates e-commerce services with professionally-produced content, driving user conversion and revenue growth[311] - The company aims to attract influencers to enhance platform adoption and user engagement, which is expected to increase profitability[324] - The CHEERS video platform has been upgraded to include a UGC rights management system, enhancing user engagement and content creation opportunities[323] Financial Performance - Gross Merchandise Value (GMV) for the e-Mall was approximately 132 million in 2020, marking a growth of 209.1%[318] - The company generates advertising revenues from various formats, including pre-video, in-video, and pop-up advertisements on its CHEERS video platform[331] - The company produces and licenses series TV shows, generating revenues through advertising fees and product placements[339] Market Trends and Projections - The total e-commerce market sales in China reached RMB 34,810 billion in 2019, with a compound annual growth rate (CAGR) of 12.4% from 2015 to 2019[347] - The population of online shoppers in China is expected to reach 850 million by 2021, with a CAGR of 10.8%[349] - The population of online video users in China reached 850.44 million by March 2020, with a CAGR of 13.3% from 2015[352] - The market scale of proprietary PGC video content-driven e-commerce platforms was approximately RMB3.5 billion in 2019, with a CAGR of 151.6% from 2016 to 2019, and is expected to grow at a CAGR of 32.5% to RMB14.5 billion by 2024[356] Technological Development - The CHEERS ecosystem plans to leverage blockchain technologies and strategic collaborations to develop a metaverse platform featuring intelligent retail, video on demand, and social networking[313] - The company is focused on developing a metaverse platform that combines online and offline experiences, utilizing cutting-edge technologies[321] - The company has developed four online games for the CHEERS e-Mall platform, monetizing through in-app purchases[333] - The company plans to launch metaverse experience centers in Beijing, Shenzhen, and New York City, integrating e-commerce, social networking, and gaming[335] - The CheerChat app, currently in beta testing, aims to penetrate the social audio market with unique features and intelligent voice translation technology[337] Compliance and Regulatory Environment - The PRC government imposes extensive controls and regulations over the e-commerce and media industries, which may impact the company's operations[367] - Foreign investment in value-added telecommunications services is restricted, requiring PRC partners to hold majority interests in joint ventures[368] - The company believes it is currently in compliance with the PRC Consumer Rights and Interests Protection Law, Online Trading Measures, and the Civil Code of the PRC in all material aspects[386] - The company must ensure that advertisements are true and accurate, complying with PRC advertising laws, or face penalties including fines and revocation of advertising licenses[391] - The company must protect user personal information and cannot disclose it without user consent, with severe penalties for violations[396] Intellectual Property and Assets - The company owned 72 registered trademarks in the PRC and 4 in Hong Kong, along with 50 registered copyrights in the PRC as of December 31, 2021[363] - As of December 31, 2021, the company had forty-four (44) registered software copyrights and six (6) artwork copyrights[406] - The company had 6 domain names registered in the PRC as of December 31, 2021[409] Taxation and Financial Structure - The enterprise income tax rate for resident enterprises is 25%, while non-resident enterprises pay 10% for income sourced within China without a local institution[422] - The standard withholding tax rate on dividends for non-resident enterprises is 20%, but can be reduced to 10% under certain conditions[431] - The VAT rate for selling goods is generally 17%, with specific rates of 11% and 6% for certain services and intangible assets[427] - The company intends to retain all available funds for business operations and expansion, with no anticipated dividends in the foreseeable future[454] Employment and Labor Relations - As of December 31, 2021, the company had 162 full-time employees and maintained a good working relationship with them, with no significant labor disputes reported[361] - The company is fully compliant with regulations regarding the housing provident fund contributions[413] - The company must adhere to the PRC Labor Contract Law, which mandates labor contracts and compliance with local minimum wage standards[410]
Glory Star(GSMG) - 2021 Q4 - Annual Report