Aussie daigou retailer AuMake plans $20m capital city domination
Health & Biotech
Health & Biotech
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Daigou retailer AuMake is looking to raise $20 million to expand its retail stores to more than 20 in the next 12 months.
AuMake — which has gifted shareholders with a stunning nine-fold return on its 8c offer price in little more than two months — targets shoppers (“daigou”) who buy Australian healthcare, cosmetics or local food products on behalf of people in China.
AuMake (ASX:AU8) has been quick to take advantage of its share price growth, now offering new shares at 63c — almost eight times its initial public offering price.
Just three weeks ago, AuMake opened a flagship store on Sydney’s George St, taking its retail presence to six stores in NSW — and now plans to expand further across the country.
“The company will implement an accelerated expansion strategy to grow its existing retail store network across Australia to reach a minimum of 20, 100 per cent owned retail stores over the next 12 – 18 months,” AuMake told shareholders.
The expansion would see another four stores in Sydney, more than five in Melbourne, several across Brisbane, Gold Coast, Perth and Adelaide.
The company is high up on the list of ASX triumphs for the year, despite only listing in October.
Chairman Keong Chan said the company was well poised to become the “pre-eminent daigou and Chinese tourist retail brand” in Australia.
“Our vision is to entrench the AuMake brand as the first port of call for daigou who live in Australia and for each Chinese tourist who visits Australia, when they are looking to purchase genuine Australian products,” he told shareholders.
Bricks and mortar stores are a focus for the company, as they work to build trust with Chinese customers who then transition to customer engagement tools through social network WeChat.
“The transition of our customers from in-store to WeChat and the level of trust that is developed during this process in the AuMake brand, is fundamental to the growth of our business,” the chair said.
“Via WeChat these personal relationships can be fostered in Australia but also extended back to China, should our customers or staff choose to return to their country of origin, which provides AuMake with vast distribution opportunities.”
As well as a retail presence in Australia, funds from the raise will increase the number of daigou support teams in China to five and increase the inventory levels of AuMake branded products.
Since listing, AU8 have already acquired brands Health Essence in health supplements and UGG AUS wool products but say the capital injection opens the possibilities to expand into cosmetics and milk formula – product categories that have already been successful for several ASX players.
Last month the company made $1.7 million in sales to take a profit of $232,000 – a 12.4 per cent increase to October.
They say many of their customers have become investors, with an increasing level of Australian-based Chinese investors joining the share register.