To enhance customer loyalty towards the Group's products, in particular its telephone cards, as well as to establish the Group's own retail outlets, the Group has established the Lotus Club outlets to target ethnic groups, such as Filipinos and Indonesians working in Hong Kong. This direct selling model to end-users not only increases the Group's profit margin, also allow leveraging with Pacific's (PLDT) 700 independent retail outlets to create a strong distribution network.

Subscribing members would be able to enjoy special promotions when purchasing the Group's products, such as coupon bonus to redeem variable gifts. This scheme ultimately initiates repeat purchase and enhances customer loyalty.

The first Lotus Club outlet commenced its business operation in April 2001, and there are currently four Lotus Club outlets set up in Central, Causeway Bay and Yuen Long of Hong Kong. The current business objective of the Group is to strategically expand the Lotus Club network both within Hong Kong and overseas, in order to build up its retail customer base and enhance their loyalty. Lotus Club could also serve as an effective platform to promote the products and value-added services of both the Group and its business partners.

Set out below are the locations and the opening dates of Lotus Club outlets currently available in Hong Kong.

	Location	Opening Date
	Shop 136, 1/F, World Wide Plaza, 19 Des Voeux Road, Central, Hong Kong.	April 2001
	Shop 1A1, G/F, Lok Sing Centre, 2-8 Sugar Street, Causeway Bay, Hong Kong.	December 2001
	Shop 1A2, G/F, Lok Sing Centre, 2-8 Sugar Street, Causeway Bay, Hong Kong.	March 2002
	Shop 37, G/F, Wan Fat Building, 8 Wang Fat Path, Yuen Long, N.T..	October 2002

The Group has also introduced vending machine as a self-served purchase model of prepaid telephone cards at the Central Lotus Club outlet. The vending machine accepts payments made by way of deducting credits from Octopus cards in order to avoid any potential losses caused by theft. Customers would also be able to review promotional information from the vending machine as a sales medium would enable the Group to effectively reduce its operating costs and attract a more diversified customer base.