COVID-19 daigou downturn: 70% staff reduction, stores closure, and salary cuts at AuMake

By Tingmin Koe contact

- Last updated on GMT

Daigou retail is one of the areas most hard-hit by the global spread of COVID-19. © Getty Images
Daigou retail is one of the areas most hard-hit by the global spread of COVID-19. © Getty Images

Related tags: China, Australia, COVID-19, daigou

The company has seven AuMake stores and another eight Broadway stores along Australia’s East Coast.

Both chains cater to daigou and Chinese tourists, selling a range of in-house brands health foods products​ such as propolis mouth spray, dairy products such as A1 and A2 milk​, as well as skincare products.

In light of COVID-19, the company had earlier closed all except four of its AuMake stores.

In its latest ASX market update, the company said it had to close all four remaining stores due to tightening government restrictions on physical movement, as well as to protect its staff and customers.

The closure meant that it had to lay off up to 70% of its staff, while the remaining ones will work shorter hours and reassigned to online, warehousing, and corporate functions.

“All AuMake and Broadway offline stores are now temporarily closed and will reopen as soon as it is safe and economically sound to do so,”​ the company said, adding that the impacted staff were given support in accessing leave entitlements and available government assistance.

On the other hand, the senior management, board, and executives have also committed to reduce their remuneration by 50% since March 1. 

The company added that it was working closely with landlords to reduce leasing costs through this period of time, as well as monitoring government support in this area.

Focus online

With the closure of its offline stores, AuMake said it would continue to focus on the growth of its online business, which had shown huge sales growth over the past two months.

Early indications are encouraging, with total online sales and high margin-owned and exclusive brand online sales growing 88% and 200% pcp respectively, for the period between January 1 and March 28,”​ the company said. 

It attributed the performance to its online and newly established Broadway WeChat stores.

In fact, the company’s online business broke new sales records in the past two months, where AUD$173 (US$105k) was achieved on February 2, which was surpassed by the record sale of AUD$237k (US$144k) on March 19.

The growth in online sales has helped offset the dip in offline sales, and the company said it would seek new growth opportunities by implementing more digital marketing to existing online customers, who are largely from China.

It added that it was developing new sales channels via existing offline and online customer networks in China.

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