AuMake pivots to sell to Asian tourists
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AuMake says it will focus on catering to Asian tourists at its Australian outlets, shifting away from its original business model of targeting Chinese shoppers intent on posting their products to the mainland.
The ASX-listed company’s 16 shops initially concentrated on selling Australian products to “daigou” – residents who frequent the stores, which each have a designated parking area, in order to send bought items to China in parcels.
“From early 2018 and due to the locations of our stores in Sydney’s CBD, 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 told shareholders on Wednesday.
AuMake announced in April that it had acquired the Broadway business, including its six Australian stores popular with foreign tourists, for $14.2 million.
“AuMake will continue to service daigou however this will increasingly be transitioning offline traffic to the company’s online platforms, to maximise efficiencies and profitability,” Chan said.
Questions & Answers
Q.What was AuMake's original business model before this shift?
What was AuMake's original business model before this shift?
AuMake initially focused on selling Australian products to 'daigou', residents who visited the stores to purchase items and send them in parcels to China. Stores had designated parking areas for these customers.
Q.Why is AuMake changing its business strategy now?
Why is AuMake changing its business strategy now?
From early 2018, AuMake observed increasing numbers of Asian tourists at its Sydney CBD stores. These tourists showed a preference for less well-known, higher margin products compared to the daigou shoppers.
Q.How will AuMake continue to serve daigou customers after this strategic pivot?
How will AuMake continue to serve daigou customers after this strategic pivot?
AuMake will increasingly transition its daigou traffic from offline stores to the company's online platforms. This change aims to maximise efficiencies and improve profitability for the business.
Q.What significant acquisition did AuMake make recently to support its new focus?
What significant acquisition did AuMake make recently to support its new focus?
In April, AuMake acquired the Broadway business for $14.2 million. This acquisition included its six Australian stores, which are popular with foreign tourists, aligning with the new strategy.
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