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China-focused retailer AuMake has signed up with the “Australian Made” campaign, brandishing the green and gold kangaroo to reinforce its position in the “daigou” market.

A daigou (which means to buy on behalf of) is anyone outside China — students, tourists or immigrants — who shops on behalf of a China resident. AuMake estimates 40,000 Australian daigou send 100 to 200 parcels to China every day.

AuMake shares (ASX:AU8) closed up 15 per cent at 38c on Monday — a 475 per cent premium from its 8c offer price in October.

Chairman Keong Chan told Stockhead the Australian Made label was a visual validation of the company’s authenticity.

“Daigou shoppers go to Coles or Woolworths because they know it is a trustworthy franchise. The Australian made logo proves to our customers that they are getting the real thing,” he said.

“Working with Australian Made allows us to grow our product range and means we have greater exposure to their 2700 suppliers. We will put space aside in our stores to give pride of place to the brands that they recommend.”

AuMake shares over the past two months. Source: Investing.com
AuMake shares over the past two months. Source: Investing.com

Australian Made chief executive Ian Harrison said the deal opened up a new channel for local products to make it overseas.

“The demand for genuine Aussie products and produce in China is growing continuously and cross-border sales, particularly those driven by the Australian-based daigou, is a major contributor to that.”

AU8 is the first daigou company to list on the ASX but the chairman says Chinese buyers have bought on behalf of others into European luxury goods and Japanese electronics markets for the past 30 years.

The company will open a flagship store in Sydney later this month, and has expansion in the pipeline for Brisbane, Melbourne and the Gold Coast.

Mr Chan said AuMake had received unprecedented sales growth and was already garnering attention on the ground in China as daigou students and travellers move back to their homeland.

“We have loyal customers in Australia who know AuMake well, but the reality is that a lot move back to China, already 10 per cent of our sales are received from China through WeChat Pay and AliPay,” he said.

“Their relationship with AuMake shouldn’t stop the moment they get on a plane.”

In order to support the overseas purchases, the company is investing in a support team based in Xiamen, China.

However, he said shut down any suggestion that the company would bypass daigou and move into direct-to-consumer sales.

“Daigous are engrained in Chinese culture and are able to do the best marketing because they are well trusted,” he said.

“If you look at big brands like Bellamy’s, A2 or Blackmores, they wouldn’t be where they are without a daigou.”

Comparable October sales figures show the company made an 110 per cent increase since last year, and reported $204,270 in profit last month.