Daigou retailer AuMake has acquired Chinese tourist focused retail network Broadway for A$14.18 million. The retailer has eight stores in Australia and New Zealand – bringing AuMake’s store count in Australia to 25.
“This acquisition is transformative for AuMake and a turning point in our evolution as a company. The dynamic combination of AuMake and Broadway, will create the leading brand in the cross border and Chinese tour group markets, which we estimate to be worth over A$4.5 billion in Australia and New Zealand,” said Keong Chan, AuMake executive chairman.
Chan said in a statement the daigou business has been investing in the market for the past 18 months, refining its business model and strengthening its expertise in the cross border market.
The latest deal will see a A$7 million capital raising backed by investors. The Chinese company said the transaction will catapult AuMake to the centre of cross-border retail and Chinese tourist markets in ANZ. The acquisition is subject to shareholder approval and will be finalised by May.
“Importantly, this acquisition will allow us to materially increase the number of consumers (and particularly tourists) visiting AuMake and Broadway’s network of 25 offline stores by leveraging off Broadway’s deep relationships with Chinese tour operators,” added Chan.
Broadway will be integrated with warehousing, logistics, marketing, IT, procurement and other head office support. Broadway Group has a vast network of inbound travel agents and tour guides in Australia and China. The company eyes a surge of the Chinese tourist market A$2 billion, “increasing AuMake’s potential market to $4.5 billion in ANZ.”
Tourism Research Australia said there will be an influx of Chinese tourists between 2016–17 and 2026–27 – an increase from 1.3 million to 3.9 million (an annual average growth rate of 11.9%). While Tourism New Zealand sees tourists to more than double from 450,000 in January 2019 to 913,000 by 2023.