GoConnect, partner buy Chinese venture

GoConnect (ASX:GCN) and partner Priority One will each buy 40 per cent of Shanghai Reliance, and use the venture to pursue a loyalty rewards program in China

New partners GoConnect (ASX:GCN) and Priority One Network Group have arranged to buy a majority stake in a Chinese internet and IT company.

GoConnect and Priority One will each take a 40 per cent stake in Shanghai Reliance Information Technology Co, which specialises in gaming, IT marketing, social networking and customer relationship management (CRM).

The company will be used to market the Priority One reward and payment system in China, through Shanghai Reliance's contacts with established e-commerce portals.

As part of the agreement, GoConnect will provide its IPTV technologies to Shanghai Reliance under a free license to help market the program, while Priority One will supply its payment and rewards system.

Announcing the deal, GoConnect said that while China has a huge internet population of 485 million and counting, the online loyalty reward market is still in its infancy.

GoConnect and Priority One first announced plans to set up a 50/50 online transaction service platform venture earlier this month.

Priority One is preparing to list on the ASX, and under the partnership deal GoConnect will take 15 per cent of a public entity.

GCN shares stayed flat on Thursday at $0.017.

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