Chinese demand for Western brands delivers record results for RooLife Group

RooLife Group ASX RLG China e-commerce revenue March 2021 quarter
In FY 2021 year-to-date, RooLife has achieved $5.7 million in revenue – up 68% already on FY 2020 with the June quarter remaining to be included.

China’s appetite for international brands which promote health and well-being has resulted in record quarterly sales and revenue for Australian e-commerce and digital marketing company RooLife Group (ASX: RLG).

The company’s unaudited revenue for the three months to 31 March came in at a record $3.4 million, representing an increase of 145% on the December quarter’s $1.35 million and up 340% on the $775,000 achieved in the previous corresponding period.

Year-to-date unaudited revenue for financial year the 2021 has now reached $5.7 million – up 68% against FY 2020’s total revenue of $3.4 million – with three months’ performance left in the FY 2021.

RooLife expects the strong sales performance will continue throughout the remainder of FY 2021 and into the new financial year.

“Our revenue mix is increasingly progressing from marketing services fees to scalable product sales, validating our vision of becoming a platform between global suppliers and Chinese consumers,” the company said.

Cash receipts

RooLife’s cash receipts for the quarter totalled $1.88 million, comprising $1.84 million from customers and $38,000 from government grants.

The company closed the quarter with $2.43 million cash in the bank and $4.62 million in receivables and inventory, providing it with balance sheet strength for continued growth.

Of this, 90% is expected to convert to and be received as cash in the June quarter, with $1.4 million cash already received in April, in accordance with expectations.

Cost-saving initiatives

RooLife expects a series of cost-saving initiatives across the organisation will help deliver positive net cash flow in the June quarter.

Reductions in administrative, corporate and staff costs and advertising and marketing expenditure are anticipated in upcoming quarters as the company continues to increase sales and financial efficiencies, leveraging its growing expertise and technology.

The company anticipates this approach will contribute to revenue and margin growth in the long-term.

New contracts

During the March quarter, RooLife secured new contracts with Murray River Organics Group (ASX: MRG) and Mildura Fruit Company to strengthen its product offering in the cross-border food and produce category.

In January, the company launched the Blis Probiotics T-mall Global store at a ceremony with the Alibaba Group in New Zealand.

Tmall is a Chinese-language website for business-to-consumer online retail, operated in China by Alibaba.

It is a platform for local and international businesses to sell brand name goods to consumers and has over 500 million active monthly users.

Online marketplace

RooLife distributes products such as skincare, pharmaceuticals, probiotics and health foods into China’s $2.2 trillion online marketplace frequented by over 900 million consumers.

It identifies trends in Chinese demand and supplies consumers with coveted Western brands such as Nuria, Colan, AFT Pharmaceuticals and Blis Probiotics, as well as the technology and sales infrastructure to sell at scale.

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