Datasea Announces Entry into Agreements that Will Place its Acoustic High-Tech Products in a Total of 263 Beauty Stores in Northern China

Rhea-AI Summary

Datasea (NASDAQ: DTSS) has signed cooperation agreements with 14 beauty industry service companies to place its acoustic high-tech products in 263 beauty salons and body care stores across northern China. The agreements, signed on December 28, 2024, through subsidiary Guozhong Haoze, target sales of 140,000 acoustic high-tech products by year-end 2025, potentially generating revenue of $11 million.

The product lineup includes acoustic air sterilizers, sleep products, and a 5G AI Digital Service System specifically developed for the beauty industry. The company plans to expand its customer channel to 10,000 beauty and body care stores across Tianjin, Hebei, Beijing, and Inner Mongolia over the next 2-5 years. The system integrates 5G and AI technologies to enhance service workflows, enable precise customer need identification, and leverage big data analytics for targeted promotions.

Positive

• Secured agreements to distribute products in 263 beauty stores
• Projected sales of 140,000 units by end of 2025
• Expected revenue of $11 million from agreements by 2025
• Plans to expand to 10,000 stores in next 2-5 years

Negative

• None.

Insights

Financial Analyst

The deal represents a significant revenue opportunity for DTSS, with projected sales of $11 million by end-2025 from 140,000 units across 263 beauty stores. For a micro-cap company with a market cap of just $16.3 million, this potential revenue stream is substantial, representing 67% of the current market capitalization. The strategic expansion into beauty salons creates a dual revenue model combining hardware sales with recurring technical service fees from the 5G AI Digital System. The planned scaling to 10,000 stores over 2-5 years suggests strong growth potential. However, investors should note the execution risks given DTSS's operational history and the competitive beauty tech market. The company's ability to deliver on these projections will be important for stock performance.

Tech Industry Expert

The integration of acoustic technology with 5G AI systems in the beauty industry represents an innovative market approach. The ultrasonic sterilizer and non-contact sleep aid products, combined with AI-driven customer service optimization, create a compelling value proposition for beauty salons. The system's ability to leverage big data analytics for targeted marketing and customer insights provides a competitive edge. The technology stack appears comprehensive, addressing both operational efficiency and customer experience enhancement. However, the success will largely depend on the actual performance of these systems in real-world applications and user adoption rates. The focus on private domain traffic pools suggests a sophisticated understanding of modern digital marketing strategies in the Chinese market.

Market Research Analyst

The beauty and personal care market in northern China presents a substantial opportunity for DTSS's expansion strategy. The initial focus on Tianjin and Hebei Province provides a solid testing ground before broader regional expansion. The target of 10,000 stores across Tianjin, Hebei, Beijing and Inner Mongolia demonstrates ambitious but potentially achievable scaling plans given the density of beauty establishments in these regions. The combination of hardware sales with digital services creates multiple revenue streams and potential customer lock-in. However, success will depend on beauty salon adoption rates and consumer acceptance of acoustic technology in wellness applications. The projected unit sales of 140,000 by 2025 appear aggressive but achievable if the value proposition resonates with end users.

The New Agreements Projected to Generate Sales of up to 140,000 Units and $11 Million in Revenue by Year End 2025

BEIJING, Jan. 6, 2025 /PRNewswire/ -- Datasea Inc. (Nasdaq: DTSS, "Datasea" or "the Company"), a Nevada-based digital technology company specializing in acoustic high-tech and 5G AI multimodal digital innovation, today announced a major milestone for its acoustic high-tech business. On December 28, 2024, Guozhong Haoze (Beijing) Technology Ltd. ("Guozhong Haoze"), a subsidiary of the Chinese operating company contractually controlled by the Company, signed cooperation agreements (the "Agreements") with 14 beauty industry service and management companies, such as Tianjin Chuangfukang Consulting Service Co., Ltd. and Tianjin Haideci Technology Co., Ltd., to place its acoustic high tech products in a total of approximately 263 beauty salons and body care stores in key markets in northern China, including Tianjin and Hebei Province. The Agreements strengthen the Company's market presence in northern China and lay a solid foundation for substantial revenue growth from its acoustic high-tech product segment.

Pursuant to the Agreements, the Company is targeting the sale of a total of approximately 140,000 acoustic high-tech products by calendar year end 2025. The acoustic products included in the Agreements are acoustic air sterilizers and sleep products, as well as the Company's 5G AI Digital Service System specifically developed for beauty industry stores. Through its 5G AI Digital System, Datasea will also provide independent technical services to these stores, ultimately helping them offer better services to their customers.

Ms. Zhixin Liu, CEO of Datasea, commented, "We are both pleased and excited to announce these partnerships with multiple beauty salons and body care retail stores in northern China. With these new partnerships, we believe we are strategically positioned to market our acoustic high-tech products and advance the adoption of our Digital System for Beauty industry, which opens up a new sales channel for our products. We expect the new cooperation agreements to contribute a total of approximately 140,000 units in sales of acoustic high-tech products by the end of 2025, potentially driving the sales of the Company's acoustic high-tech products to over $11.0 million (Approximately RMB 77 million) in 2025. Over the next 2-5 years, we plan to further expand our customer channel to up to 10,000 beauty and body care stores, covering provinces in Tianjin, Hebei, Beijing and Inner Mongolia."

Key Aspects of the Agreements

1. A Boost to Acoustic High-Tech Product Sales

• Datasea partners with beauty and body care stores to sell acoustic high-tech products directly to consumers across approximately 263 stores.
• Major products include the 'Ultrasonic Sterilizer' and the 'Non-Contact Sleep Aid'.
• Through technological innovation, these acoustic products enhance customer experience and optimize service quality for the partnered stores.

2. Provides 5G AI Digital Beauty System to Partnered Stores

• Tailored Design: The system is purpose-built for the beauty salon and body care industry, integrating 5G and AI technologies to reshape service workflows.
• Intelligent Services: AI capabilities enable precise customer need identification and personalized service recommendations, enhancing service quality and efficiency.
• Efficient Marketing: Leveraging big data analytics, the system enables targeted promotions and automated marketing, helping businesses attract customers to increase sales.
• Private Domain Customer Expansion: The system builds basic private domain traffic pools to deepen customer insights and deploy marketing tools, effectively growing the customer base.
• Enhanced Retail Store Experience: Optimized store management and employee training to ensure improved customer satisfaction and overall service quality.

Establishes Foundation for Expansion of High-Tech Acoustics Segment

• Datasea plans to continue to drive the sales of acoustic hardware products through its expanding network of retail beauty salon and body care stores, targeting sales of approximately 140,000 products by the end of 2025.
• Concurrently, the Company will charge technical service fees to provide its 5G AI Digital System for Beauty industry to partnered stores .
• Over the next 2-5 years, the Company plans to expand its customer base to up to 10,000 beauty and body care stores, covering provinces in Tianjin, Hebei, Beijing, and Inner Mongolia.
• With the continued growth in the number of its partner stores, Datasea expects to increase its online and offline sales of its acoustic high-tech products.

Strategic Success Plan for the High-Tech Acoustics Segment

Datasea intends to continue to expand its sales channels and drive the digital transformation of this vertical in northern China via its advanced acoustic high-tech products and 5G AI Digital Beauty System. With leading edge technological expertise and marketing knowhow, the Company is committed to creating sustainable value for merchants and consumers. As Datasea further expands its operations, it is positioned to achieve significant growth and sustained profitability in its collaborative partnership with China's beauty and body care industry.

About Datasea Inc.

Datasea is a leading provider of products, services, and solutions for enterprise and retail customers in converging and innovative industries, Acoustics High tech, and 5G AI multimodal digital platform, especially focusing on ultrasonic, infrasound, and directional sound technology. The Company's advanced R&D technology serves as the core infrastructure and backbone for its products. Its 5G multimodal digital segment operates on a cloud platform based on AI. Datasea leverages cutting-edge technologies in intelligent acoustics, utilizing ultrasonic sterilization to combat viruses and prevent human infections, and is also developing innovations in directional sound and medical ultrasonic cosmetology. In July 2023, Datasea established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware, in a strategic move to mark its global presence. This underlies Datasea's commitment to Acoustics High tech and its intent to offer leading edge acoustic solutions to the U.S. market. For additional information, please visit: www.dataseainc.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates", "target", "going forward", "outlook," "objective" and similar terms. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and which are beyond Datasea's control, which may cause Datasea's actual results, performance or achievements (including the RMB/USD value of its anticipated benefit to Datasea as described herein) to differ materially and in an adverse manner from anticipated results contained or implied in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in Datasea's filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov. Datasea does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

Investor and Media Contact:

Datasea Inc. Investor relations
Email:  investorrelations@shuhaixinxi.com

Precept Investor Relations LLC
David Rudnick
+1 646-694-8538
david.rudnick@preceptir.com

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SOURCE Datasea Inc.

FAQ

What is the projected revenue for Datasea (DTSS) from the new beauty store agreements?

Datasea projects revenue of $11 million (approximately RMB 77 million) by year-end 2025 from the new beauty store agreements.

How many beauty stores will carry Datasea's (DTSS) acoustic products under the new agreements?

The agreements will place Datasea's acoustic products in 263 beauty salons and body care stores across northern China.

What is the sales target for Datasea's (DTSS) acoustic products under the new agreements?

Datasea targets sales of approximately 140,000 acoustic high-tech products by calendar year end 2025.

What regions in China will Datasea (DTSS) expand its beauty store presence?

Datasea plans to expand across provinces in Tianjin, Hebei, Beijing, and Inner Mongolia over the next 2-5 years.

What products will Datasea (DTSS) sell through the beauty store network?

Datasea will sell acoustic air sterilizers, sleep products, and provide its 5G AI Digital Service System through the beauty store network.