RooLife Group signs Key Marketing, Sales & Distribution Contracts in Q3FY20; Stock Spikes

  • May 07, 2020 AEST
  • Team Kalkine
RooLife Group signs Key Marketing, Sales & Distribution Contracts in Q3FY20; Stock Spikes

Artificial Intelligence (AI) and e-Commerce marketing company, RooLife Group Ltd (ASX: RLG), has released its Activities Report for quarter ended 31 March 2020. RooLife Group Ltd, powered by its hyper-personalisation Artificial Intelligence (AI) System, helps its customers to sell more effectively online through optimisation of online engagement, customer acquisition and direct sales in Australia and China.

March Quarter 2020– Key Highlights

  • RooLife Group to support and drive sales for Nuria Beauty in China

During the quarter, RooLife Group had announced a new partnership with Small World Brands, a U.S. and Singapore based beauty and wellness company, for the provision of marketing, sales and distribution in China for its Nuria Beauty brand.

The contract term is for two years, whereby RooLife would be receiving a combination of service fees per month and commissions to be derived from sales of products, which would ultimately yield sales revenue for the Group to the tune of $ 1.3 million in the first two years given, minimum performance milestones are met.

Nuria Beauty has been developed and managed by an experienced team from Johnson and Johnson, comprising CPG (Consumer Packaged Goods) veterans like Josh Ghaim (former Global CTO Consumer Products), Naomi Furgiuele (previously VP R&D, Global Beauty Face & Sun Care), and Dawn Kidd (former VP Marketing, Global Beauty Face & Sun).

Source: (Company’s Report)

RooLife Group would support in driving sales of Nuria Beauty products through social media, as a key opinion leader and handle content channel management on platforms such as WeChat, Weibo, Douyin, YouKu, as well as Baidu. The Company is also responsible for operating cross-border e-commerce sales channels for the brand including Kaola, TMall, VIP, JD, Taobao, Pin Duo Duo and Little Red Book flagship stores.

RooLife’s engagement with Nuria Beauty expands Nuria’s global footprint into China providing it with direct access to China’s $ 33 billion and growing skincare market and a large consumer base. Nuria Beauty is first of a number of brands that Small World Brands is looking to launch in China and RooLife expects to continue assisting Small World Brands with its future endeavours too.

  • Marketing for AFT Pharmaceuticals

During the reporting period, RooLife Group successfully drove online brand awareness and sales for ASX and NZX listed AFT Pharmaceuticals (ASX:AFP) in China, reporting more than 9.24 million unique social media views and engagements for AFT’s products online across the RooLife-managed Chinese digital platforms, in preparation for sales launch in April 2020. Subsequently, AFT Pharmaceuticals expanded its commercial relationship with RooLife for the launch of a Little Red Book ‘Pop Store’ particularly for the sale of its Vitamin C Lipo-Sachets product in the Asian country.

This store will enable access to a broader Cross-Border e-Commerce audience of ~300 million consumers, mainly middle to upper-class women aged 20-35, which lines up well with the demographic profile of usual customers.

  • RooLife Marketing Partner for Alipay Discovery Platform

Subsequent to quarter end, the Group was appointed as a Marketing Partner by Hangzhou, China-based Alipay.com Co Ltd for its online platform and services and as per the Marketing Cooperation Agreement executed by the two parties, RooLife would provide services for businesses to list, promote and sell via Alipay’s platform.

Source: (Company’s Report)

Presently, Alipay, via its leading mobile and online payment platform, serves over 1.2 billion users worldwide, in collaboration with its e-wallet partners and currently has ~900 million users in China alone.

RooLife’s role is to facilitate businesses in marketing and selling to Chinese shoppers by engaging with retailers and merchants worldwide (with Australia being in focus) to deliver Online Store Management, Creation and Management of Marketing content, Activation and Onboarding of Retailers and Merchants, Promotions and Online Coupon Management, and Data Analysis.

  • Corporate and Financial Position

In February 2020, the Company welcomed Mr Tim Allison as an Independent Non-Executive Director, who has an extensive experience in commercialisation and scaling across a range of technology businesses, from traditional retail and distribution to cutting-edge consumer technology in the online and mobile sectors.

Although, the demand for RooLife’s products remain high, the Company did experience a level of logistical and product supply challenges through March 2020 as a consequence of the COVID-19 pandemic, which impacted on the generation and recognition of revenue.

Moreover, the closure of commercial flights into China caused delays in supply from some of the Company’s brands which it represents in China, consequently effecting revenue recognition. Thus, RooLife is actively working to identify and implement alternative transportation of product to China via ship to address supply issues.

The cashflow impact of the above events is expected to be mitigated through assessment of the various federal and state government COVID-19 assistance packages. Besides, the Company has taken a prudent approach to cost management and implemented a number of cost-saving measures while the Company directors, employees and contractors agreed to reductions in their salaries during this time.

RooLife closed the quarter with $ 1.791 million of cash at bank as at 31 March 2020.

Revenue for the Quarter was lower than forecast, cash collections increased over the prior Quarter while the total expenditure was lower than the prior quarter due to the delays in supply of product and consequently lower cost of goods sold, reduced marketing expenditure and reduced staff and contractor costs as part of the cost-saving measures introduced.

The RLG stock settled the day’s trade on 7 May 2020 at $ 0.023, up 4.54%, with a market capitalisation of ~ $ 7.49 million.

 


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