• RLG and AULife will jointly market and sell products into China via RLG marketplace
  • The agreement is already generating $680k of sales orders and $506k receipts
  • RLG says China is a high growth consumption market, with plenty of headroom for growth

 

RooLife Group has executed a binding agreement with China-focused e-Commerce company AULife International to jointly market and sell international products in China under the new platform and brand, RLG Marketplace.

The binding agreement further formalises the relationship between the parties as established in the term sheet announced in June.

RLG marketplace will connect international businesses and brands directly with Chinese shoppers, selling RooLife Group’s (ASX:RLG) and its partner’s range of Australian milk powder products and range of dairy food products as well as international product ranges across combined sales channels online and offline in China.

The company is confident of targeting additional revenue streams through new product sales, as well as the provision of digital marketing, social media, and e-commerce store operations to a new and targeted client base.

“We welcome this new relationship with AULife and we are excited by the opportunities ahead of us to work together on the RLG Marketplace, selling high-quality and in-demand International – and particularly Australian products, into the world’s largest e-commerce market,” RLG CEO Bryan Carr said.

RLG Marketplace will be owned 51% by RLG and 49% by AULife’s Asia Pacific Capital Holdings, with profit sharing of 80% to RLG and 20% to AULife (net profit basis).

 

Expanding Chinese distribution footprint

RLG identifies trends in Chinese consumer demand, secures distribution rights for international products that fit consumers’ needs, then provides the tech and sales infrastructure necessary for brands to sell at scale in China.

China is a net importer of food and food products, and the company says the country is a high growth consumption market – with plenty of headroom for growth.

And since Aussies products are recognised for their high quality and the high standards of production, it’s no surprise that the company’s distribution footprint with Chinese customers is growing in leaps and bounds, with AULife holds distribution rights for a leading portfolio of brands and products.

Plus, the agreement is immediately revenue generative, with preliminary sales orders of $680k and receipts of $506k achieved since the partnership was announced.

This follows the sales channel achieving sales and orders of approximately $440,000 in two new lucrative product segments – milk powder and dairy food products – within its first two weeks of operation in July.

“We are already proving the value of this news sales arrangement, having achieved sales and orders in two new lucrative product segments for RLG being Milk Powder and Dairy Food Products and we look forward to continued expansion, combining the talents of the Aulife team with our Australian and China-based teams,” Carr said.

“We encourage Australian companies interested in accessing the China market to contact us and register for the RLG Marketplace.”

 

Working on some exciting new opportunities

“We are bringing together the essential ingredients for success here – quality products and an expanded customer base – with the team from AULife increasing our reach and ability to sell directly to more Chinese shoppers,” the company told Stockhead.

“We are only at the early stages of this partnership and the sales are already flowing, plus we are working on some exciting new opportunities together which we look forward to sharing with shareholders and investors in due course.”

 

Performance rights add to sales incentive

The term sheet also provides for the engagement of Martin Place Equity Partners to provide public and investor relations services and to introduce Chinese investors to RLG.

As an incentive to maximise sales performance under the arrangement, the term sheet stipulates that AULife (or its nominee) and Martin Place (or its nominee) will be issued staged performance rights based on hitting milestones.

RLG says it’s about rewarding AULife and Martin Place for the “provision of direct profit contribution to RLG”.

 

This article was developed in collaboration with RooLife Group, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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