AuMake doubles profit, rapidly grows customer base
AuMake more than doubled its profit and nearly doubled sales in Q3, compared to the previous corresponding period.
The daigou-focused retailer reported $1.68 million in profit in the March quarter, 104 per cent up on the same period last year, and $9.9 million in sales, up 93 per cent on the same period last year.
Almost a third of AuMake’s total sales in Q3 were made online, primarily coming from the Chinese social media app, WeChat.
AuMake grew its online customer database more than six times over, from 20,000 to 130,000 over the quarter, and is investing heavily in its online infrastructure to continue such growth. This includes a larger online customer service team, improvements to its various online sales platforms, such as WeChat and JD.com, and a new packaging facility.
According to AuMake, the March quarter is typically a slower one for the business, as it includes a four-week period surrounding Chinese New Year when Chinese logistics companies close, and a large number of daigou shoppers return home for the holiday.
As such, the brand expects to see a material improvement over the upcoming June quarter, particularly as the recent $14.2 million acquisition of competitor Broadway will take effect in June.
AuMake said the acquisition makes it the “largest China-focused offline and online retail platform in Australia”, and that it will utilise Broadway’s existing relationships with over 100 travel agencies in China to reach new customers.
“The acquisition of Broadway has transformed AuMake into a significant and influential business in the ANZ Chinese tourist and diagou market,” AuMake executive chairman Keong Chan said.
“However, AuMake is more than a simple retail business. AuMake’s Chinese focussed retail platform is underpinned by a unique business model that utilises the strength of its online and offline sales to incubate, promote and sell ANZ brands to Chinese consumers.”
According to a strategy update issued by AuMake on Tuesday, the retailer aims to grow its online channel to half of total sales, and to grow its own-brand product revenue to $15 to $20 million by FY20. Own-brand products brought in $4 million in FY19.
The retailer is also exploring opportunities to open co-branded offline stores and products with JD.com, and to synergise the supply chains of the two brands.