We provide massage services performed by our mechanical massage equipment stationed at various points of service in public venues of high foot traffic across China. According to Frost & Sullivan, we ranked first among all mechanical massage service providers in the PRC in terms of transaction value for three consecutive years from 2022 to 2024, representing a market share of 33.9%, 37.3% and 42.9% in the corresponding year, respectively. We also ranked first in terms of revenue in the mechanical massage market in China in 2024 with a market share of over 50%. As at 31 December 2024, there were over 10,000 massage service providers in China, among which over 50 were mechanical massage service providers. According to F&S, the market size of China’s mechanical massage service market in 2024 (i.e. RMB2.7 billion) represented approximately 0.5% of the overall massage market in China in 2024 (i.e. RMB536.2 billion), in terms of transaction value. The market share of our Group in the overall massage market was approximately 0.2% in 2024 in terms of both transaction value and revenue. We launched our Lemobar (樂摩吧) brand in 2016, dedicated to providing consumers with mechanical massage services in various consumption scenarios, including commercial complexes, cinemas and traffic hubs (including airports and high-speed rail stations). As at the Latest Practicable Date, we had established a network of more than 48,000 POS for our mechanical massage service, placing more than 533,000 mechanical massage equipment across 31 provincial-level administrative division and 337 cities in China. We expanded our POS network from 21,727 POS as at 31 December 2022 to 45,993 POS as at 31 December 2024, representing a CAGR of approximately 45.49%. We have a solid market presence in terms of consumers reach, with a cumulative total of over 174 million identifiable service consumers and more than 40 million registered members as at the Latest Practicable Date.
Our Revenue Model
During the Track Record Period and up to the Latest Practicable Date, we mainly derived our revenue from the following:
‧ mechanical massage service, for which we procure massage equipment from suppliers, who are required to strictly follow our specifications, and deploy such massage equipment in various scenarios to offer mechanical massage services; and
‧ others, mainly including (i) online sale of household massage equipment and massage accessories; and (ii) digital advertising services.
Adopting Dual-line Operation Modes
Our operation modes are mainly categorized into Direct Mode and Partner Mode. Direct Mode is the primary operation mode for our mechanical massage service, with approximately 70.4% of our POS operating under the Direct Mode as at the Latest Practicable Date. Under the Direct Mode, our in-house operating team manages POS operation, which includes POS site selection, occupancy negotiation, POS site decoration and operation and maintenance of the POS. We also operate through the Partner Mode, whereby we collaborate with Local Partners who leverage their local resources and connection. As at the Latest Practicable Date, approximately 29.6% of our POS were operated under the Partner Mode. Under the Partner Mode, our Local Partners are responsible for POS operation, while we provide a comprehensive mechanical massage service solution that includes: (i) the establishment and upgrading of the LMB Links; (ii) the development of the Lemobar brand; (iii) providing comprehensive guidance on POS operation and maintenance; (iv) supplying mechanical massage equipment and related spare parts; (v) granting access to the LMB Links for necessary operation of the equipment; and (vi) offering customer service assistance to handle consumer complaints.
We assign a dedicated operations specialist to each of our Local Partners to oversee their daily operations and provide regular guidance. Leveraging our internal system, LMB Links, we collect, store and analyze operational data, which is reviewed and summarised in monthly meetings. In addition, we conduct annual performance evaluations of our Local Partners based on their annual revenue growth. For details, see “Business — Our Business Segment — Mechanical Massage Service — Direct Mode and Partner Mode — Partner Mode”. We also adopt different division of work for maintenance and cleaning work under our two business models. Under the Direct mode, we perform maintenance and cleaning work ourselves through a combination of our in-house staff and outsourcing to external service providers. Under the Partner mode, Local Partners are responsible for the maintenance and cleaning of the POS and massage equipment. We provide them with a full set of maintenance work guidelines and ensure strict adherence through regular and ad hoc supervision as well as performance evaluations. For details, see “Business — Our Business Segment — Mechanical Massage Service — Maintenance of our massage equipment”. Through clear division of responsibilities, collaboration and empowerment, our Local Partners are closely aligned with our business objectives, creating mutually beneficial growth opportunities. As at the Latest Practicable Date, we have established stable partnerships with approximately 95% of our Local Partners for more than five years. We believe that our systematic dual-line model of “Direct operation + Local Partner affiliation” is our key differentiation from our competitors, which allows us to efficiently expand our nationwide business coverage while continuously optimizing and improving operational efficiency.
Wide Scenario Coverage and Continuously Expanding POS Network
We have implemented effective business expansion strategies to systematically grow our POS network nationwide. Our POS network spans a variety of consumption scenarios, including commercial complexes, cinemas, transportation hubs and other scenarios. In commercial complex we place POS of mechanical massage service in public areas such as atriums and corridors. In cinema, we install mechanical massage cushions on the backs of seats inside the theater halls, or place POS of mechanical massage service in the waiting areas or ticketing halls within the cinema. For traffic hub, we place POS of mechanical massage service in airport terminals or waiting halls. According to F&S Report, as at the Latest Practicable Date, in terms of developing our POS network, we have achieved the following milestones: (i) 5,318 commercial complexes with a GFA of over 30,000 square meters, accounting for approximately 70.4% of commercial complexes with a GFA of over 30,000 square meters in China; (ii) 904 cinemas with an annual box office exceeding RMB five million, accounting for approximately 35.0% of cinemas in China with an annual box office exceeding RMB five million; and (iii) 24 airports with an annual passenger throughput exceeding 10 million, accounting for approximately 60.0% of airports in China with an annual passenger throughput exceeding 10 million.
We have designed our mechanical massage spaces to adapt to a variety of scenarios. In terms of space design, we incorporate our brand color–orange and our brand IP, “lele Cat”, as core visual elements, while also integrating distinctive local or scenario design features to reflect the character of each location. On the technology front, our mechanical massage spaces are connected to our digital platform, LMB Links, through third-party cloud services, enabling remote monitoring of the entire POS operations. By tailoring the experience to different consumption scenarios, we aim to create massage environment that blend privacy, functionality, and aesthetic design, offering consumers an immersive escape from the hustle and bustle of daily life.
Source: Lemo Services (02539) Prospectus (IPO Date : 2025/11/25) |