Daigou business AuMake’s recent pivot to target visiting Asian tourists paid off in the December quarter, seeing its best financial performance since listing on the ASX in 2017.
Off the back of attracting a proportion of the lucrative Asian tourism trade that exceeded management’s expectations, AuMake delivered a positive EBITDA for the quarter led by a 20 per cent gross margin and revenue in excess of $18 million.
While AuMake said it would detail the results in its next financial report, it said a large part of the result is due to the business unlocking synergies between its AuMake and Broadway business, which was acquired in July 2018.
At the group’s AGM executive chairman Keong Chan laid out a new focus for the business centred on increasing the number of Asian tourists visiting the business, bolstered by Broadway’s strong ties with Asia’s travel agents.
“We began to observe the increasing visitation of Asian tourists and their propensity to purchase less well-known and higher margin products relative to daigou,” AuMake executive chairman Keong Chan said at the business’ AGM.
“Bearing in mind we only commenced integration of Broadway four months ago, we are confident that this is only the beginning of a much larger growth story.”
According to Chan, AuMake’s potential for growth and scale is now clearly defined, and the business has foundations for profitable growth into FY20 and beyond.
However, AuMake is not abandoning its daigou trade, despite the increased focus on a more local, tourist based offering.
“Diagou remain an important part of the company’s strategy to promote Australian and New Zealand brands to the Chinese market,” Chan said.
“AuMake will continue to service daigou, however this will increasingly be transitioning online traffic to the company’s online platforms, to maximise efficiencies and profitability.”