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Reporter丨He Jipai Editor丨Yan Ziwei

Sun Taoran, chairman of Lakala, submitted his report card.
On August 10, the company announced that its revenue from January to June was 2.982 billion, a slight increase of 0.45%, and its net profit was 420 million, which basically stabilized. The annual revenue is expected to be around 6 billion, which is equivalent to 2023.

POS machines, barcode scanners, QR codes for payment and other ubiquitous payment tools nourish this leading third-party payment company. Last year, its payment transaction volume exceeded 4.5 trillion yuan.The scale of bank card acquiring ranks first in the industry。

Every day, it handles 30 to 40 million payment transactions.

At its peak, Lakala’s market value exceeded 38 billion yuan. As of August 9, it was roughly 10 billion yuan, a quarter drop from the beginning of the year.

Changchun boss Sun Taoran, who founded Lakala, is now the second largest shareholder. Together with his brother Sun Haoran, they hold a total of 9.8% of the shares.

Currently, the company has no actual controller, and its largest shareholder is Lenovo Holdings, which holds 26.1% of the shares.

Both volume and price increase

Sun Taoran’s Lakala’s main business is collecting orders.

The payment acquisition business, which brings in over 5 billion yuan a year, contributes 87% of the company's total revenue. In simple terms, Lakala mainly makes money by providing payment acquisition services to merchants and charging handling fees.

The larger the transaction size, the higher the commission will be.

The QR code payment collection business has grown rapidly. From January to June, the transaction amount reached 673.8 billion yuan, an increase of 28%, accounting for about 30% of the total.QR code transaction volume exceeded one trillion for the first time。

Compared with QR code scanning, the transaction amount of bank cards is higher, reaching 1.48 trillion yuan in the first half of the year. Affected by the downward trend of the industry, it decreased by 15% year-on-year.

Sun Taoran's team must follow the footsteps of payment giants.Expand the scale of QR code scanning transactions。

In July, Alipay launched a new feature - no need to ask "do you want to scan me or do I want to scan you", just unlock your phone and pay with a touch.

Alipay’s barcode payment product rarely has such a major upgrade, and it is given great attention internally.

Following closely, Lakala became one of the first manufacturers to support "touch and pay" and has launched pilot merchant deployment in Shanghai. At the same time, the product matrix is ​​also exploring integration with "touch and pay" devices and adapting to basic payment functions such as receipt printing.

The net fee rate for scanning the QR code is higher than that of bank cards.The increase in this proportion has driven the overall net fee rate up by 1 basis point, and the overall gross profit margin is 32.91%.

Sun Taoran's team must focus on both quantity and price to improve profitability.

While expanding the scale of QR code scanning, the company slightly increased the prices of some of its products in the first quarter.

In May, the announcement showed that the credit card fee rate for bank card acquiring business was 0-2%; the equipment service fee was 0-1,000 yuan; and the operating service fee was 0-300 yuan/year.

At the beginning of the year, an agent revealed that Lakala did not inform the agent of the rate adjustment. "Our company learned about this after receiving feedback from customers."

Steps outward

Sun Taoran’s team also cooperates with global payment giants.

At the beginning of the year, Lakala's general manager Wang Guoqiang specially received a distinguished guest - Previn Pillay, Visa's global senior vice president, who is in charge of the Asia-Pacific merchant and acquiring business department.

Tap to Pay (contactless payment) is the focus of Wang Guoqiang's introduction.

Its logic is similar to Alipay's "touch and pay".

"The Tap to Pay solution has aggregated the NFC payment capabilities of many of the world's major card organizations, such as Visa, and supports flexible output to partner institutions in various ways," said Lakala.

Visa said it will work with Lakala and provide necessary resource support to jointly promote domestic and foreign card acceptance coverage and Tap to Pay scenario construction.

In an interview in March, Sun Taoran mentioned the pain points of foreigners’ transportation in China.Lakala has developed softPOS products that comply with the standards of international card organizationsIt is convenient for drivers, tour guides, taxis and other scenarios. Foreign tourists can use NFC Android phones to support mainstream overseas bank card payments.

By deepening cooperation with international card organizations such as Visa, Sun's team has accelerated its overseas expansion.

In terms of business, the company has successively added payment products in Southeast Asia and Africa, deeply explored the B2B foreign trade business model, and created cross-border payment solutions for Chinese brands to go overseas. The cross-border payment business has served more than 90,000 merchants in total.

It also uses investment and mergers and acquisitions.

At the end of June, market news came out.It plans to acquire 8.5% of the shares of WUZO in the UK, the project is in the process of project filing. The latter was founded in 2021 and is a financial institution headquartered in London.

According to the plan of Sun Taoran's team, this year the focus will be on Japan, Singapore and other places.

"In the future, Lakala will be a comprehensive service provider online and offline, domestically and internationally." As early as three years ago, the company's top management proposed a diversified positioning.

Passionate about venture capital

Sun Taoran, who founded Lakala, is the soul of the company.

At the performance briefing at the end of May, Lakala’s senior management stated that as chairman, Sun “is specifically responsible for the company’s strategy, management team, and corporate culture building.”

last year,Sun Taoran's annual salary at Lakala is as high as 5.29 million yuan, 300,000 more than Wang Guoqiang.

The 55-year-old Sun is also known as the "Godfather of Entrepreneurship".

He graduated from the Department of Economics and Management of Peking University. He started six businesses and succeeded six times. The companies he participated in founding include BlueFocus and Henderson Land Development. His book "36 Rules for Entrepreneurship" has sold more than 1 million copies.

He will use the connections, resources and methodologies he has accumulated over the years.Investing in venture capital and business schools。

Koala Fund, initiated and founded by Sun Taoran, has over 2 billion yuan in funds under management. It focuses on "digitalization" and "autonomy and control". Its representative projects include Shouqianba, Yidianyun, and Ruilai Wisdom.

The Kunlun Academy, which he co-founded, has received strong support from entrepreneurs such as Yu Minhong and Jiang Nanchun.

Kunlun Academy only recruits 32 students per term, targeting company founders, CEOs, and partners. The learning cycle is one year, with six major module courses and offline small-class teaching as the main focus.Tuition fees are as high as 500,000 yuan。

With Sun Taoran as the center, there are intricate ties between the companies in the business empire he created.

For example, the investors of Koala Fund include Lakala, BlueFocus, Lenovo Holdings, etc.; Lakala is the largest shareholder of BlueFocus, holding 4.19% of the shares.

Earlier, Sun Taoran no longer served as the legal representative of Lakala, and judging from his public appearances, his daily management work has also been reduced.

"I hope to build Lakala into a respected company." He had such an ambition and hoped to achieve a compound growth of about 30% every year.

There is still a gap to this goal, and Sun Taoran's team must make more efforts.

Image source: Lakala, except where noted