Over the last three years, daigou retailer AuMake has sold more than AU$125 million worth of Australian and New Zealand products to Asian consumers. This includes more than AU$60 million of sales in the last financial year alone. 

Now the daigou retailer is exploring social e-commerce as part of the next stage of its evolution. 

According to Aumake’s executive chairman Keong Chan, social e-commerce is “the new way that Chinese consumers, particularly younger consumers, are purchasing products”. 

“They want to discover and buy new products and brands with their friends, and share that experience with their social networks. [It’s in] contrast to the individualistic search-and-click approach taken by the older generation in China and most western countries,” Chan told Inside Retail. 

Following the announcement of a $7 million capital raise last month, AuMake is beginning the buildout of its social marketplace that allows Asian influencers, buyers and sellers to engage directly with Australian brands.

The social e-commerce site will include short form video, peer-to-peer review and group buying capability and AuMake will provide end-to-end logistics management.

By removing the middleman, social e-commerce allows for a higher level of engagement between the brand and the customer. AuMake expects this will result in more word-of-mouth promotion, higher sales conversion rate, lower customer acquisition cost and higher levels of repeat purchasing.

Chan said it is “the natural evolution” of AuMake’s business model, and will diversify the company’s revenue streams to include transaction service fees, advertising and marketing revenue as well as a profit sharing model. 

Keeping up with China

While AuMake’s social e-commerce platform, launched late last year, is already generating strong active new user growth and repeat purchasing, the latest funding will allow for commercial rollout and marketing activities to significantly increase the platform’s visibility in mainland China. 

According to Aumake, the new platform will allow Australian brands to utilise the tools and features already seen on Chinese social e-commerce platforms.

“Users will soon be able to utilise popular social e-commerce features such as group buying capability, short-form video, gamification, livestreaming, and peer-to-peer reviews. Asian consumers are very familiar with these features, which are common on Chinese social commerce platforms,” Chan said. 

“Asian consumers expect to be able discover products with friends, share those experiences and make a purchase all on the same integrated platform – the product is part of the journey, not just the end point.”

With access to the social networks of Asian influencers, Australian brands can access a much larger customer base. This positions influencers as “independent promoters of their brand rather than simply purchasers of their products”, according to Chan.

“In practice, it works like this: Asian influencers like an Australian product because of its engaging short video content, they then share that product with their friends, who in turn share with their friends. Together they group purchase to lower the individual price. The Australian brand then sends those products to China, which are delivered in two to three weeks, providing a seamless customer experience.”

Brand awareness 

One of the key benefits of the social e-commerce platform, according to AuMake, is that it supports better brand awareness. By giving influencers the opportunity to transparently review brands, they can communicate their authenticity and quality to shoppers. 

“Our social e-commerce marketplace will enable ANZ brands to build brand equity in China through increased audience visibility and higher sales conversion rates,” Chan said. 

“For the first time, Australian brands can use an Australian platform to help grow their brand awareness and sales in China with relevant data insights. At present, Australian brands can be [overwhelmed] using one of the big platforms in China with no support.”

There’s also local language and local support available for brands on the platform. 

Future of shopping

The latest social e-commerce marketing features will all be offered via a WeChat mini program, website and Android/IOS application and AuMake will commence direct marketing campaigns for new Australian brands as part of its social commerce strategy. 

While offering a completely new experience to traditional retail channels, Chan said the physical store network complements and supports the online marketplace by facilitating cost-effective conversion and repeat purchasing of “highly affluent and valuable customers”.

With high expectations for the success of the platform, AuMake is also looking to expand into further FMCG product categories.

“Longer-term, we’re also looking to expand into new product categories, such as fresh food, seafood and wine.”