2016 was a very busy and exciting year for KinerjaPay, as we set out on our new mission to facilitate and participate in the growth of e-commerce in Indonesia and the surrounding regions, by providing consumers and merchants with a safe and secure digital payment platform. We made great strides in implementing our business plan and established several strategic initiatives for long term growth, and I believe we are well positioned to establish KinerjaPay as a leader in Southeast Asia's burgeoning e-commerce marketplace.
Modifying Our Corporate Structure:
The year began with the Company signing an exclusive world-wide license to use and commercially exploit the technology and intellectual properties of KinerjaPay, including the website, KinerjaPay.com, and its e-commerce portal.
In conjunction with the licensing agreement, the Company initiated a Reg S offering, and in January we completed the minimum with subscriptions in excess of $500,000. This offering remains open, and to date, we have raised $1,105,000.
In March, the Company completed a corporate name change from Solarflex Corp to KinerjaPay Corp., and implemented a 1-for-30 reverse stock split. Shares of our common stock now trade on the OTCQB market under the symbol "KPAY."
Appointing New Management
As founder of Kinerja, I now proudly serve as Chairman and CEO of KinerjaPay. To give you a bit of my background, I earned my undergraduate degree in Management Information Systems and SAP Implementation from the University of Southern California School of Engineering, and post-graduate degree in Information Science from the University of Toronto in 2004. After completing my studies, I went on to found PT. Kinerja Indonesia as well as a number of other companies.
In April, I brought Mr. Deny Rahardjo on as CEO of our fully-owned subsidiary, Kinerja Pay Indonesia. Deny brings more than 20 years of IT experience from such multi-national corporations as Astra International Nokia, Lear Automotive, Microsoft and Polycom Asia Pacific. He has already proven to be a strong addition to our operation; together, we have built our organization to a staff of more than 50 people, comprising industry leaders in management, sales and technology.
Defining Our Mission
We intend to establish KinerjaPay as a leader in Indonesia's digital economy, with a particular focus on the middle- and low-income markets. These consumers are underserved by the banking and credit card providers, and represent a largely untapped opportunity.
Indonesia's digital industry is still in the very early stages, however, with more than 250 million potential customers, the prospects for growth are substantial. Over 50% of the Indonesian population is below the age of 30 and highly adaptive to new technology. The number of internet users is excepted to double to 125 million by 2017, with smartphone ownership increasing from 20% to 52% over the same period, giving Indonesia the highest percentage penetration rate compared to other Southeast Asian countries, according to Redwing, a technology advisory group. Analysts also estimate that Indonesia's online transactions will account US$24.6 billion this year, which represents less than 2% percent of the Country's retail transactions, as compared to 12% in the United States.
We believe that a number of trends will continue to fuel this growth. The rise in disposable income, a growing middle class, cheaper smartphones and tablets that sell for less than US$100, as well as rapidly broadening internet access, are all contributing to pushing the nascent Indonesian e-commerce market toward a critical point in terms of scale and profitability.
Products and Services
KinerjaPay has developed a number of products and strategies to facilitate Indonesian consumers' participation in e-commerce. In addition to providing a secure and efficient platform to make and receive payments online, we have created a number of unique features designed to engage users, including interactive gamification component which allows users to play and earn rewards while enjoying the benefits of shopping online. We are also providing users the convenience of making online payments of their utility bills, phone top-ups/data plans, insurance premiums, automobile loan installments, and many others applications.
In May, KinerjaPay entered into a partnership with Bitcoin Indonesia, making us the first e-commerce portal in Indonesia authorized to accept and transact Bitcoin across its platform, enabling account holders to convert the virtual currency to Indonesian Rupiah to pay their bills, transfer money, or make purchases in the Company's ecommerce market.
The simplicity and security of our platform is appreciated by retailers as well, and in celebration of Indonesia's 71st Independence Day, on 17 August, we launched our "I Love Indonesia" campaign. Designed to broaden awareness of locally produced goods, the Campaign also stimulated domestic consumption, promoting approximately 200 items from very select prominent brands in the KinerjaPay marketplace. Most of the items are related to fashion, however other categories include handicrafts, batik items, coffee, tea, and others local specialties.
In September, we announced a cooperation with PT Indonesia Enam Dua, owner of 62hall.co.id. 62hall enables individual, small and medium business owners to setup an online store with a unique white label and wholesaler concept that includes system, procurement, operational support and logistics. There are currently over 700 online stores under their brand, offering more than 150,000 products and 1,000 types of services. Our two companies are working together to establish Kinerjamall.com, an online market combining the products, merchants and services from both companies. The KinerjaPay payment solution will also be used by all online stores currently under the 62hall brand.
At the writing of this letter, according to Google Analytics, the KinerjaPay site has more than 74,000 active users who spend an average of 13 minutes, 18 seconds on the site during each visit. It is our goal to expand our user base substantially over the coming year, through the promotion of our existing services as well as the addition of new solutions such as KinerjaGames and KinerjaTravel.
To date, our operations have been funded through debt and the sale of equity -- most recently the $1,105,000 in proceeds we secured through our private placement offering. This offering remains open, and we anticipated raising another $1 million from institutional and high net worth individuals in Indonesia.
However, I am pleased to report that KinerjaPay has begun to record revenue this quarter; we expect to generate approximately US$ 700,000 GMV (gross merchandise value) and US$ 55,000 direct revenue by year-end. These funds, together with the additional proceeds raised through the private placement will provide the capital necessary to implement our business plan.
In October we filed an S-1 Registration Statement with the SEC to provide for the registration of the shares acquired through the private placement, so that they might be sold in the public markets without restriction. That Prospectus was declared effective on October 21, 2016. Although the Company will not receive any capital from the sale of this stock, we do believe it will benefit the market for our shares.
In closing, I would like to thank our staff, whose hard work and dedication have made this year's achievements possible. Their talents and strong connection with customers ensure that we are well prepared to recognize and leverage opportunities for growth in order to maximize shareholder value.
I would also like to thank you for your support, and look forward to sharing more good news with you in the future.
Edwin W. Ng
Chairman and CEO
About KinerjaPay corp.
KinerjaPay Corp. through its wholly owned subsidiary PT Kinerja Pay Indonesia, enables consumers to "pay, play and buy" through its secure web portal and mobile applications. Based in Indonesia, the platform provides a secure payment solution as well as a growing virtual marketplace, where participants can buy and sell products and services. The Company also offers a number of in-app services that cater to mobile users, such as an eWallet, social engagement and digital entertainment related applications. KinerjaPay is also pursuing other e-Commerce verticals including travel, fashion, gaming and productivity applications. The Company's services are available through its mobile applications and on its website at http://www.kinerjapay.com. For more information, visit http://www.kinerjapay.co
Notice Regarding Forward-Looking Statements
This press release may contain forward-looking statements, about KPAY's expectations, beliefs or intentions regarding, among other things, its product development efforts, business, financial condition, results of operations, strategies or prospects. In addition, from time to time, KPAY or its representatives have made or may make forward-looking statements, orally or in writing. Forward-looking statements can be identified by the use of forward-looking words such as "believe," "expect," "intend," "plan," "may," "should" or "anticipate" or their negatives or other variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical or current matters. These forward-looking statements may be included in, but are not limited to, various filings made by KPAY with the U.S. Securities and Exchange Commission, press releases or oral statements made by or with the approval of one of KPAY's authorized executive officers. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause KPAY's actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause KPAY 's actual activities or results to differ materially from the activities and results anticipated in such forward-looking statements, including, but not limited to, the factors summarized in KPAY 's filings with the SEC. In addition, KPAY operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond its control. KPAY does not undertake any obligation to publicly update these forward-looking statements, whether as a result of new information, future events or otherwise. Please see the risk factors associated with an investment in our securities which are included in our Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission on February 11, 2016.
For more information, please visit our website http://www.kinerjapay.co. There you will find access to all of our past press releases and SEC filings regarding the activities discussed in this letter.
SOURCE KinerjaPay Corp.