Retail business AuMake International (ASX: AU8) has signed a strategic agreement with e-commerce marketplace JD Worldwide with a view to building a platform for new Australasian brands wishing to enter the Chinese consumer market.
The agreement will combine AuMake’s retail store and brand-building capability in Australia with JD Worldwide’s online and logistics capability in China, to create a retail online platform for Australian and New Zealand products to reach Chinese buyers.
Under the general terms, AuMake will connect existing and future retail store customers to JD Worldwide’s online store.
JD Worldwide will actively channel Australian and New Zealand online product enquiries to the same store, and will provide AuMake with access to its warehouse and dispatch logistic network in China in order to streamline product delivery to customers.
The companies will also jointly develop and co-own products to be sold exclusively on the JD Worldwide online platform and in AuMake’s Australian retail outlets.
Executive chairman Keong Chan said the collaboration with JD Worldwide will help AuMake reach “hundreds of millions of customers” in China with new brands and products, including those owned by AuMake.
“As we expand our retail store footprint across Australia and New Zealand, we anticipate our traffic to increase with JD Worldwide’s support,” he said.
“Together we believe we can fundamentally change the way in which Australian and New Zealand products reach the Chinese market.”
Mr Chan said the strategic agreement is the latest development for AuMake’s multi-channel platform in Australia.
“We are combining online and retail store concepts to reach the Chinese market, which follows a recent trend in China from the likes of Amazon and Alibaba’s TMall, which recognise how important retail stores are when it comes to promoting new brands and products to Chinese consumers,” he explained.
AuMake is active in the daigou market (expats who buy consumer goods for people back home in China) and Chinese tourist markets with 13 offline stores in Sydney and growth strategies to expand into other Australian states to promote over 700 Australasian brands.
The company offers products across four categories including healthcare (supplements and food), body care and cosmetics, dairy products and baby food, and wool and leather goods.
The multi-channel approach will provide AuMake with the foundation for significant revenue growth and sustainable gross margins of up to 30% within 12 months.
At midday, shares in AuMake were trading 1.82% higher at $0.280.