News: GoConnect in deal with China Merchants Bank and China Union Pay

GoConnect (ASX:GCN) should trade higher after being advised by Priority One Network Group that GoConnect's uctv.fm IPTV network will host and deliver video content for Priority One.

This follows its content provision agreement with Double Eagle of Hong Kong.

Double Eagle is a Hong Kong based company founded by investors involved in e-commerce and mobile commerce in China.

Double Eagle has developed an e-commerce site dedicated to retail high end fashion products in the China market, with additional categories to be added over time.

Double Eagle has entered into an agreement with China Merchants Bank of China to provide the site for exclusive use by China Merchants Bank's 45 million plus debit and credit card customers.

China Merchants Bank has over six hundred branches and sub-branches in Mainland China and one in Hong Kong, and in November 2007 it won federal approval to open a branch in New York.

The site will be supported by one of China's top licensed payment systems, China Union Pay, and will accelerate China Merchants Bank's entry into e-commerce.

The site is expected to become operational this financial year.

Priority One will receive 50% of all “Transaction Fee Income” generated by the site and any transaction fee income generated from purchases by China GoConnect Limited.

Merchants Bank's 45 million customers on the site will be shared equally with GoConnect.

In 2011 GoConnect and Priority One entered into an equal revenue share agreement for the hosting and delivery of video content across GoConnect’s uctv.fm IPTV network.

GoConnect will host 7 TV channels on its uctv.fm IPTV network for Priority One, and in particular in respect of the Life, Leisure & Fashion Channel.

The channel will showcase The World of Fashion globally, providing viewers with the ability to purchase promoted fashion items.

The card customers of China Merchants Bank, who have exclusive access to the site, will also have free access to premium fashion related video content on the Life, Leisure & Fashion Channel hosted on GoConnect's uctv.fm IPTV network.

China recently overtook the USA as the biggest e-commerce market in the world and is set to be worth US$541 billion by 2015.

China’s e-commerce market has grown 71% annually since 2009 with 49% of its population making an online purchase last year. This figure is estimated to rise to 71% by 2017.

The working relationship that will follow the agreement between Priority One and Double Eagle and the involvement of China Merchants Bank and China Union Pay with Priority One can be expected to lead to further businesses in China for the Priority One and GoConnect partnership.