Listed speciality retailer AuMake International (ASX:AU8) has reported an 89 percent increase in online gross margins over the same period last year, driven by growth from its newly launched Broadway Online site and promotion of higher margin products through the existing AuMake Online platform.
In a market update, the company said growing online demand for its high-quality and authentic Australian and New Zealand products had increased online gross margins to 21 percent for the June quarter, delivering a 21 percent lift in total online gross profits compared to the prior corresponding period.
Since it launched in February, the company’s Broadway Online platform attracted more than 10,000 unique visitors, driving online purchases from over 1,000 individual China-based consumers. Visitor and purchase volumes increased rapidly towards the end of the quarter with more than 3,000 unique visitors in the last two weeks of June due to direct marketing promotions. Over 40 percent of sales comprised of high margin owned and exclusive brand products, particularly in the health supplement category.
Data analysis has revealed that approximately 10 percent of unique visitors made a purchase at least once while three percent of unique visitors were repeat purchasers. This resulted in more than 3,000 parcels being shipped to 32 provinces in China, ranging from first to third tier cities.
The Broadway Online platform provides the foundation for future high-margin products and sustainable online growth, which does not directly compete with other large existing online platforms that predominantly focus on lower margin high-volume products, such as infant formula and well-known health supplement brands,” the company said.
The Broadway Online platform will be a permanent feature of the AuMake business and will complement the eventual return of Asian tourists to the company’s physical stores. Broadway Online also complements its existing AuMake Online platform, which primarily targets daigou customers in China and Australia.
AuMake’s online presence leverages the company’s growing database of over 40,000 unique consumers, which enables direct online marketing of new, high-quality products to customers located in China.
The database has been compiled through the collection of online and in-store customer data and sales conversion. The ability to utilise existing customer data for marketing outreach is expected to deliver an increase in repeat online purchasing from customers located in China and provides an important and differentiated source of future sales growth for AuMake.
In addition to its growing online sales, AuMake has been progressively re-opening its physical store network with three venues now trading in the metropolitan Sydney area. The company said trading activity for these stores has been better than expected with volumes in June approximately twice as high as those experienced during May.
AuMake Executive Chairman, Keong Chan said “The company is extremely pleased with the early results of its renewed online strategy. Our growing database and improved online experience allow us to reach a vast number of customers in China via our trusted travel agent relationships. Brand Australia is still very strong in the minds of the Chinese consumer.
“We are totally committed to innovation, providing a contemporary experience to our online and physical store customers and providing quality products. We are excited by the opportunities available to meet and exceed the changing retail tastes of the Chinese customer.”
AuMake also plans to contemporise its in-store customer experience with significant changes to store layout, presentation and product category expansion.