RooLife Group (ASX: RLG) has reported more than $1 million in sales of newly-launched RLG Coffee products including beans, beverages, packaged foods, and coffee machines to the Chinese market during November.
Strong demand for the products across major online platforms JD.com, Tmall, and Douyin (TikTok China) was complemented by sales to expanding offline general trade and retail channels.
A continued scale-up driven by an expanded distribution network, a growing product range, and targeted marketing initiatives position RLG Coffee toward a double-digit million-dollar annualised sales run-rate.
Coffee Distribution Deal
RooLife entered China’s fast-growing coffee market in September when subsidiary company RLG Global Trading (Zhuhai) secured a ++$64 million two-year distribution deal++ with local wholesaler and distributor Zhongshan Runlian Commercial.
The agreement – which RooLife expects to deliver material revenue visibility and growth for the company – includes opportunities to bundle coffee machines with recurring coffee subscriptions to enhance margins and customer loyalty.
Under the terms, the RLG Coffee range will be offered to online and offline sales and distribution channels including flagship storefronts, sub-distribution channels (such as general trade stores and supermarkets, as well as convenience and specialty retail outlets), and through partner distributors at offline café and food service providers.
RooLife’s strong November cash receipts reflect an early conversion of contracted demand into monthly orders, supporting the company’s focus on compounding volume and margin within the coffee vertical.
Growing Coffee Culture
China is transforming from a traditionally tea-dominated nation to a modern, international coffee culture, with consumption increasing at around 21% per annum since 2011 compared to the global average of approximately 1.8%.
At end 2024, Shanghai had approximately 9,115 coffee shops — more than London, New York, or Tokyo — confirming its position as one of the world’s most densely ‘caféd’ cities.
Global coffee majors are planning for growth in the region, with Starbucks announcing plans to expand from 8,000 outlets to 20,000 outlets nationwide in partnership with Boyu Capital.
Home-brew and instant formats including ready-to-drink coffees and convenient sachets have also become high-growth categories in lower-tier cities where café networks are still developing.
Industry analysts expect China’s coffee sector to exceed $230 billion in the coming years, highlighting its status as one of the world’s fastest-growing coffee markets.
Long-Term Confidence
Managing director Bryan Carr said the November sales figures offered shareholders growing confidence in the long-term value of RLG Coffee.
“RLG Coffee is an example of our strategy in action – identifying demand, deploying data insights, and rapidly introducing proprietary branded products into high-growth markets—in this case, one of the world’s most exciting consumer markets,” he said.
“Coffee is becoming a core pillar of our company’s growth in the food, beverage, and health and wellness space that will contribute meaningfully to revenues and margin expansion.”
The RLG Coffee launch builds on RooLIfe’s recent partnership with Fortune China 500 company Eternal Asia Supply Chain Management, which services 1 million retail outlets and 2,600 major enterprises in more than 320 cities across the country.
RooLife anticipates this partnership will provide it with a platform to expand RLG Coffee and other products from cross-border e-commerce into China’s mainstream general trade retail network.
