Listed retailer AuMake International (ASX:Au8) is gaining traction in the giant Chinese online and home shopping markets with its range of Australian and New Zealand manufactured products.
The company’s latest China market update reports rising sales in its retail shops and in Chinese so-called daigou markets.
AuMake reports a significant price differential between China on-shelf supermarket and
daigou channel prices, highlighting the importance of alternative channels in reaching
customers based in inland China.
The company markets a range of Australian healthcare, skin, body care, cosmetics, dairy products and baby food products, with milk and baby products particularly popular.
AuMake said it is now considering “highly attractive commercial terms” being offered by Australian manufacturers vying to supply the company’s planned move into own-brand milk formula products.
The market update said: “Should an agreement be reached on these proposed terms, AuMake anticipates significant improvement in relation to gross margin and delivery time performance.”
AuMake launched its own branded Propolis mouth spray on China’s home shopping channel JiaJia on November 20, with the product well received by the channel’s massive television audience.
“Commencing product promotion and sales via JiaJia is an important milestone for AuMake as it signifies the satisfactory completion of a detailed due diligence process performed by a Chinese State Owned Enterprise.”
AuMake operates retail stores at George Street and Haymarket in Sydney and other locations, attracting Chinese tour groups.
Founded by a group of Chinese Australian business executives, AuMake reported sales of $10 million in the latest Sepember quarter, a rise of 43 per cent on June quarter sales.
In its market update the company welcomed legislation to come into effect in China in 2019 which it said would further stimulate the cross border e-commerce channel CBEC.
“These measures are anticipated to increase the total size of the CBEC and it is anticipated that legitimate cross border e-commerce participants, including AuMake and professional daigou, will increase their market share as illegitimate operators are phased out with increased regulation.”
Picture: AuMake/Haymarket store.
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