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BUSINESS MODEL
AND STRATEGIC
OBJECTIVES
LEADERSHIP
GOVERNANCE
SHAREHOLDERS’
INFORMATION AND
ADMINISTRATION
OPERATING
PERFORMANCE
FINANCIAL
PERFORMANCE
BLUE LABEL INTEGRATED ANNUAL REPORT 2014
33
CONVERSATION WITH JOINT
CHIEF EXECUTIVE OFFICERS
CONTINUED
BLUE LABEL IS A DISTRIBUTOR OF
VIRTUAL GOODS
We are the leaders in what we do. In South Africa,
where we started commercialising our innovation,
we now distribute various categories of goods and
services: prepaid airtime and starter packs, prepaid
electricity, ticketing, merchant acquiring, bill payments
and financial services. Our footprint across India,
Mexico and the UK also continues to expand.
Blue Label is a lifestyle enabler. Through the
deployment of a myriad of different types of touch
points, we are able to deliver products and services
in an effective and efficient manner, while capable
of facilitating convenient and suitable payments –
be it cash, EFT, debit and credit cards. As we say
‘If it can be digitised it can be distributed by us
’.
BLUE LABEL IS ANALOGOUS TO A
VIRTUAL RAILROAD DELIVERING
PREPAID GOODS AND SERVICES
The more often we repeat this analogy, the easier it is
to follow it. Our business is about the distribution of
secure electronic tokens of value and services, and
can be compared to a virtual railroad. We
commenced building our virtual railroad with our
proprietary platform, AEON, as the enabling carrier
for transactions, which in this analogy are the tracks
and locomotive. Each additional product is another
carriage on the train. Incremental costs are minimal,
because the heavy lifting to establish the distribution
network is already in place, which results in profit
margins filtering straight through to the bottom line.
The importance of distribution is how we leverage the
last mile of our distribution channel which we have
built. Whoever manages the last mile of the channel,
actually owns the ability to extend products and
services into the channel. Since the point-of-sale
terminal is always located in the last mile, the person
managing it decides what products and services may
be sold from it.
We are a B2B distribution and payments company,
where our proprietary platform acts as a neutral
aggregator in delivering products and services. We
should not be likened to the more capital intensive
mobile network operators, as our capital expenditure
is mostly geared to the production of income,
supported by an inexpensive, yet sophisticated,
POS device.
BARRIERS TO ENTERING OUR
MARKETS
Some of these barriers to entry are our greatest
assets, which fortify our foundations:
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Lag times in negotiating supplier and customer
contracts can hinder integration.
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Long-term contracts and relationships with
customers and suppliers are strong levers to
sustainability.
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Lock-out periods for processing new and
developing technologies.
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Rolling-out devices takes time.
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Integrating systems are time consuming, as
customers prioritise their own needs/objectives
and/or products and services.
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Our technology platforms:
•
•
AEON is proprietary, agnostic, offering neutral
aggregation, plug ‘n play, proven, scalable,
no fees payable to third parties.
•
•
Postilion switch is unique for banking and
financial services graded transactions.