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AuMake reports strong growth off daigou boom

AuMake has released its June quarterly report today showing the company’s overall sales and gross profit have continued to lift, despite a seasonal decline with fewer Chinese tourists visiting Australia over the winter period.

AuMake’s Burwood Daigou Hub opened in June and has emerged as one of the company’s top performing stores with an average gross margin of 16 per cent.

The company’s integration of Kiwi Buy and its five Sydney-based retail stores has successfully transitioned with a positive financial contribution from the first week of last month with an average gross margin of 20 per cent across all five locations.

“The June 2018 quarter has been another period of strong growth and progress for AuMake. The stabilisation of operational costs and increasing profitability from the AuMake business, including the Kiwi Buy acquisition, has allowed management to work towards the achievement of total operational break-even during the 2019 financial year,” AuMake executive chairman, Keong Chan said.

“The achievement of operational break-even will be a significant milestone given the scale of the AuMake business, which now encompasses 13 retail stores in Sydney, one Daigou Hub in China, online functionality and a corporate head office consisting of 30 experienced staff in the areas of marketing, procurement and finance to cater for the growth of our business. An additional and reoccurring revenue stream is from the promotion and marketing of Australian brands into China utilising the AuMake platform. Receipts of $120,000 and further forward booked orders are expected in the September 2018 quarter.”

The daigou company has also joined recently JD.com platform in China with its own brand products. AuMake said in a statement that it has seen early positive sales growth via the online e-commerce giant and is in discussion with JD.com on a wider collaboration.

Its acquisition of Kiwi Buy has significantly increased AuMake’s online presence. The company said the current trends indicate that approximately 50 per cent of Kiwi Buy sales are received via the website and the Kiwi Buy App.

Furthermore, AuMake-owned brand AU8, a newly developed skincare product range, was launched during the quarter. The whole product range includes a mouth freshener, serums and creams. Early sales trends are positive with the range representing four per cent of total owned brand sales for the June quarter.

“This is possible only because of the distribution channels that we are creating in Australia, which gives us the necessary credibility and brand recognition in China; and in a relatively short period of time we are now able to tangibly engage with that market in a material way,” added Chan.

Following the announcement of the Chemsave partnership in April, AuMake product display units were introduced to 32 Chemsave pharmacies in New South Wales and the ACT, with positive sales momentum.

AuMake said the rollout to Victoria and Queensland Chemsave stores will continue over the next two months. The new products will also appear on Chemsave catalogues during the September 2018 quarter.

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