Jatenergy (ASX: JAT) takeover target Golden Koala has been invited to establish a flagship store on a leading cross-border sales platform called Kaola.com.
Jatenergy is in the process of acquiring 51% of Golden Koala, with the transaction expected to be completed later this year, subject to Jatenergy shareholder approval at a general meeting scheduled for 27 March 2018.
In which Jatenergy has agreed to acquire 51% of Golden Koala and will issue 83,333,333 shares to NetEase as part consideration.
Kaola is a constituent of NetEase, one of China’s largest and fastest growing cross-border e-commerce platforms which opens the possibility for Golden Koala to market its extensive range of milk products to Chinese customers.
NetEase launched the Kaola.com platform in 2015 to market popular PC-client and mobile games, advertising services, e-mail services and e-commerce initiatives.
Kaola.com has quickly become one of the world’s fastest growing e-commerce platforms, and according to data from iiMedia Research, attained a 24% market share in the first half of 2017.
It is expected that all sales will be made by Golden Koala selling directly to buyers through the platform with Kaola.com deducting selling fees. The fees will vary between the different Golden Koala products and will depend on the volume of each product sold.
According to Jatenergy, it has the “crucial CIQ (Chinese Inspection and Quarantine) import licenses; the distribution channels; and the online and offline resources needed to launch and grow Australian brands and products in the Chinese market.”
“As Chinese consumers become increasingly sophisticated, their focus has shifted from pricing concerns to a search for high-quality and reliable brands,” said Lily Lei Zhang, CEO of NetEase.
Ms Zhang also described Kaola.com customers as “largely well-educated young women living in China’s major cities, seeking health and a high quality of life.”
Following today’s announcement, Ms Zhang also added that the company expects to “buy around US$11 billion of inventory from the general market over the next three years.”
News of the announcement sent Jatenergy shares 16% higher, to trade at $0.18 per share, and valuing the company at A$44 million by market capitalisation.