Jatenergy (ASX: JAT) is maintaining its commercial momentum as the company announced a Letter of Intent (LoI) signed with Shanghai Dragon Corporation (SDC).
According to company director Wilton Yao, JD.hk is only the second major Chinese online platform to select Golden Koala, after baby products specialist NetEase Kaola.
Together with Shanghai Dragon’s retail shop presence, Jatenergy expects its latest commercial LoI to “deliver a huge lift to brand profile and sales.”
Just last month, Jatenergy entered into a distribution agreement with Jiangsu Jbingo International Com and has now further boosted its market reach.
SDC is a well-established state-controlled consumer-facing company in China with annual sales in excess of A$1 billion. SDC currently employs over 2,000 people with over 4,000 retail outlets opened to date.
Both parties have formally agreed to collaborate to bring Australian products to Chinese consumers, as well as to develop their very own brands aimed specifically at the Chinese market.
Jatenergy offers a unique capacity to both Australian companies seeking brand representation in China, and to Chinese platforms and distributors seeking Australian products.
According to the terms of today’s deal, Jatenergy will be responsible for arranging the import of various goods into China, including developing a sales and marketing platform to assist with generating larger sales volumes into the most thriving consumer market anywhere in the world.
The LoI does not specify commercial terms, with Jatenergy explaining that specific commercial details are to be “determined on a product-by-product basis”.
Golden Koala approval
Jatenergy has confirmed that its intended takeover of Koala will go ahead after its shareholders ratified the decision at the company’s general meeting, held on 27 March 2018.
Golden Koala’s range of dairy products has been selected by JD Global to be sold on cross-border platform JD.hk with the company anticipating orders from JD Global “commencing during the current quarter”.
Chinese commercial might
JD is China’s largest retailer by revenue, with over 266 million annual active users.
JD also claims the largest fulfilment infrastructure of any e-commerce company in China with seven fulfilment centres and more than 400 warehouses covering 2,830 counties and districts.
“This week we have taken major steps forward to sell Golden Koala products, both through China’s biggest online seller, and offline through a major state-owned trading company and retailer,” said Mr Wilton Yao, director at Jatenergy.