Australia-based OpenDNA Limited (ASX: OPN), powered by the OpenDNA hyper personalisation and profiling Artificial Intelligence (AI) System, is a provider of fully-integrated digital marketing and customer acquisition services that drive the online sales of products and services for its clients, those with Australia and China integrated sales strategies, via personalised real-time, targeted marketing.
The company’s Roolife online e-Commerce marketplace allows companies to directly sell their offerings to the consumers in China with payments processing via Wechat and Alipay platforms. RooLife, with a key focus on sectors including Health, Cosmetics, Skincare & Tourism, provides these brands with an end-to-end e-Commerce solution, including fully-operated and managed e-Stores, cross-border payments and easy shipping solutions.
Recently on 21 October 2019, OpenDNA released its TechKnow Invest Conference Presentation capturing the highlights of the year.
- OpenDNA Revenue Model
Through the financial year 2019 (FY19), the company rapidly built Multiple Revenue Streams, focusing on:
- Digital Marketing and services both domestic and international markets
- Digital marketing and services in China
- Royalties or commissions on product sales in China and Australia.
OpenDNA has the following sources of revenue at present:
The Business Model is given below, and the services are typically billed and paid for in advance.
- Service Revenue Gross Margin 15% - 40%.
- Product Sales Revenue Gross Margin 15% - 50%.
OpenDNA envisions that the year 2019-2020 (FY20) would be a period of transition from Development to Revenue Growth.
- Key Recent Developments
- Partnership with Perth Airport for Duty Free Shopping in Australia and direct sales to Chinese travellers with collection at Perth Airport on arrival and/or departure. Daishu AI Recommendation Engine integrated into the Roolife platform, optimises the product to shopper The services would be launched in November 2019.
- Agreement signed for the provision of Digital Marketing & Online Customer Acquisition services to Frasers Property.
- Appointed Digital Partner by National Breast Cancer Foundation for driving Brand Awareness and Profile.
- Acquisition of QBID (Quality Brands International Direct), which broadened the client base and sales.
- WeChat and Alipay Payments agreement with Western Australian tourist destination Lobster Shack.
- Strategic investment of $ 500,000 with Lobster Shack owners, the Thompson Family, via issue of 13,157,895 new fully paid shares (Issue price: $ 0.038). In addition, OPN issued 1,075,000 shares as part consideration for corporate, investor and public relations services.
- Tech agency QEdge appointed as Exclusive Distributor in China for OpenDNA’s AI and Machine Learning technology.
According to the Australian Bureau of Statistics (ABS) and Tourism Australia, of the total number of international visitors to Australia from different countries in the year ended December 2018, Chinese travellers constituted the highest number at 1.4 million. Also, these travellers spent a total of $ 12 billion ($ 8,500 per visitor in Australia) during the year ended December 2018, as per data for expenditure by international visitors.
- Significance of the QBID Acquisition
OpenDNA signed the agreement to acquire Quality Brands International Direct (QBID) in September 2019. The deal is scheduled to be finalised in Q2 FY2020 and extends the company’s expertise in building tailored Digital Marketing services utilising China’s unique social media environments while also offering additional access to all major e-commerce platforms in China.
In addition, QBID further expands OPN’s RooLife sales channels and marketing capability in both China and Australia, providing a larger customer base creating new opportunities for OPN’s AI System. QBID is expected to add new revenue streams from Q2 FY2020 for the OpenDNA Group and is a highly synergistic and complementary business. The deal would also expedite OPN’s China Growth Strategy by leveraging QBID’s successful sales performance and market penetration in China since 2015.
- Strategy for the Next 12 Months
- OpenDNA’s key goal is to further build diverse revenue streams including the ongoing and recurring monthly marketing retainers from key clients; commission on sales from key Australian Premium Brands being sold into China; commercialising the data and analytics via key insights captured from OpenDNA AI technologies and transactional revenues from payment gateways.
- Growth across multiple industry verticals (scalable and flexible business model) including the expansion of AI capabilities and products into new sectors – Airports, Entertainment, Tourism and Tourism Bodies; specifically, tourism focussed solutions based on individual preferences and budgets and implantation of Daigou strategy- partnering with Chinese Students in Australia through partners.
- Further market penetration into China with expansion of distribution and logistics partners in key locations as well as a dedicated and qualified marketing and sales strategy; expansion and roll out of OPN’s integrated WeChat and Alipay payment services in Australia and leveraging key licences for importing and selling online in China.
OpenDNA has a market cap of ~AUD 9.81 million and approximately 272.5 million shares outstanding. On 22 October 2919, the OPN stock was trading at AUD 0.037 at AEST 02:46 PM.
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