Retailer AuMake expects daigou lift from new China rules AuMake International, which sells vitamins, skin care products and infant formula to Chinese tourists and has a large presence among daigou traders selling on Chinese e-commerce sites, expects new regulations coming into place in China on January 1 to add extra momentum to its sales. AuMake executive chairman Keong Chan said at the company's annual meeting on Thursday that it had been increasing its relationships with Chinese travel agencies and tour guides and so the number of visitors to its Sydney stores was on the rise. All up AuMake runs 13 retail stores. Chinese tourists spend an average of $3500 on their trips to Australia, with about 25 per cent of it on skin care items, health products and gifts. Tourism industry data shows 1.4 million Chinese tourists come to Australia annually. The company estimates about 400,000 daigou traders are selling Australian goods on Chinese e-commerce sites, and it is aiming to court more of the higher-profile big volume traders through a special tourism industry trade show on December 8 at a hotel in Sydney to be attended by about 2000 key players. AuMake is courting the 1.4 million Chinese tourists who come to Australia each year. AuMake has about 20 big daigou operators preparing to live-stream the event back to their customers in China. Mr Chan said the new regulations on cross-border e-commerce in China, which come into effect on January 1 would enable the bigger and more professional daigou to expand their market share "as illegitimate operators are phased out with increased regulation". Under those changes, the company is expecting more daigou sales activity, largely because of a new regulation where the quota of goods captured under the new policies will be raised from 2000 Chinese yuan to 5000 Chinese yuan per transaction, and from 20,000 to 26,000 Chinese yuan per head per year. AuMake listed on the ASX in October 2017 and hit a high of 79¢ on the ASX in early December, 2017 before steadily declining. But the stock has levelled out at just below 30¢, closing up 1.8 per cent to 28¢ on Thursday. The company acquired a network of KiwiBuy retail stores in May to expand its bricks and mortar presence in Sydney. It now operates 13 bricks and mortar outlets across its brands in Sydney, five of them under the KiwiBuy banner, and eight under the AuMake brand. In June it opened its first store in Xiamen in China under a strategy of servicing an expanding network of daigou who are returning to China to live, but keeping the relationships with those entrepreneurs who had previously been based in Australia and buying goods from AuMake stores. AuMake has been buying new brands or developing its own brands from scratch to try and differentiate its product suite, rather than offer the same big consumer brands in infant formula and vitamins that are big sellers everywhere. AuMake has a range of honey under the Medigum brand and also sells Herbsmart healthcare and Health Essence supplements. It has also established its own skin care brand using the AU8 branding.
AU8 Price at posting:
28.0¢ Sentiment: Buy Disclosure: Held
