AuMake’s work transforming its business from a physical daigou chain to an influencer-led social commerce marketplace has continued to weigh on its short-term results, with a revenue figure of $2.6 million for the fourth quarter dragged down by product manufacturing and operating costs.
After costs, the business suffered a $1.8 million loss for the period, bringing its unaudited year-to-date loss to $7.8 million.
The transformation work is now finished however, according to executive chairman Keong Chan, which should lead to improved financial results in the future as the business gets underway.
“Our new online platform is entirely bespoke and was developed by our technology team in Australia and China, and involved the co-ordination of three leading solution providers in China,” Chan said.
“Through our new platform, anyone with a WeChat account can be an influencer and effectively act as a sales agent for the brands. It is not uncommon for a WeChat user [in Asia] to have in excess of 5,000 people in their address book, providing brands with a cost effective yet sizeable and scalable channel to grow their presence in the Asian market.”
The company did see improved operational cashflow for the period, due to increased profitability from online revenue and owned-brand health supplements accounting for 7 per cent of revenue by generation 30 per cent of total gross profit.
The business also cashed out four of its stores and continued “labour restructuring”, which will see operational expenses fall 30 per cent in the first quarter of the new year.
AuMake will also trial the use of its social e-commerce platform in Australia next year, and is seeking to grow its portfolio of New Zealand-made products to sell on to its Chinese target market.