Spotlight On E-Commerce Marketing And AI Company, OpenDNA’s September Quarter 2019

OpenDNA Limited (ASX: OPN), based in Australia, has released its Quarterly Activities Report for the three months to 30 September 2019, wherein the company secured multiple new customers and grew revenue streams across a range of projects, well in accord with its business strategy.

The company is playing a major role in unlocking the relationship between the businesses and the shoppers of their products, allowing the two parties to master their experiences while discovering valuable content along the way, so that every engagement is a mutually rewarding one. FY19 marked a transformation period for OpenDNA. READ here.

September Quarter 2019: Key Highlights

Significant business developments during the period included-

• Perth Airport for Duty Free Shopping in Australia and direct sales to China Project
• Frasers Property – Digital Marketing & Online Customer Acquisition
• National Breast Cancer Foundation - Appointed Digital Partner to drive Brand Awareness and Profile
• Announcement of proposed QBID (Quality Brands International Direct) acquisition
• WeChat and Alipay Payments Deal with Wester Australia’s tourist destination Lobster Shack.

OpenDNA announced its partnership with Perth Airport in early August 2019 and began with the implementation of the Perth Airport RooLife Online Shopping platform through which Perth Airport’s retail products would be marketed and sold online to Chinese travellers based on their profiles and purchasing behaviour, both in Australia and China.

Perth Airport is known as Australia’s Western Hub with as many as 14 million passengers travelling through its terminal every year. Pursuant to the agreement, OpenDNA’s full suite of services to Perth Airport will encompass online licensing for China, system hosting, marketing design, sales promotion and management services.

The Perth Airport RooLife platform will be launched in November 2019, providing an easy way for Chinese consumers to access product offering by Australian companies using their mobile phones, with payment processing via WeChat Pay and Alipay whilst in the airport, and during their travels around Australia or from their home in China. The platform launch is scheduled at an opportune time to service the busy travel and tourist period during December and to meet the shopping demands of the growing number of travellers expected on the new flights direct from Shanghai to Perth commencing in January 2020, which leads into the peak Chinese New Year travel period.

(Source: Company’s Report)

The platform marketing would be executed via the Airport’s WIFI environment and placement of the QR Code (above) throughout high-traffic areas and on digital advertising screens. As customer engagement is optimised, the customer base and associated sales are expected to shoot up over the next two quarters.

OpenDNA also signed on board the iconic Western Australian tourist destination, Lobster Shack (www.lobstershack.com.au) for the provision of marketing and Chinese mobile payment processing to service the Chinese tourism market with first sales expected in the December Quarter 2019. In addition, the company also agreed on a strategic $ 500k-placement of OpenDNA shares to the Thompson Family, who are founders of the Lobster Shack restaurant and Indian Ocean Rock Lobster, the seafood processing facility in Cervantes, Western Australia, engaged in the business of exporting seafood products to key markets including China.

OpenDNA and Lobster Shack plan to strategically work together on the following agendas:

• Implementation of the RooLife China payments processing system (including WeChat & Alipay payment gateways) into the Lobster Shack;
• Development of strategic initiatives and delivery of the same with the objective of increasing the Chinese tourists visiting the Lobster Shack;
• Developing Chinese language messaging, marketing materials and mobile applications for the optimisation of ordering and enhancing sales of Lobster Shack product offerings;
• Exploring and evaluating further business opportunities in cross-border transactions and the sale of products into China.

Subsequently, in mid-September 2019, OpenDNA signed an agreement for the acquisition of Quality Brands International Direct (QBID). Over the last four years, QBID, a Chinese market entry and digital marketing company, has been successfully propelling e-Commerce sales in China through the provision of its different multi-platform e-Commerce solutions across many major platforms and eRetailers in China, thereby facilitating traditional B2B distribution of registered imported products in China.

With the completion of the acquisition, OpenDNA expects to accrue immediate additional revenue, add complementary digital marketing capabilities, enhance its management team and provide immediate sales channels for its RooLife customers. This is because QBID’s current capabilities would naturally enhance and expand the services of OpenDNA’s RooLife business through the addition of additional marketing, translation, logistics, warehousing, trade regulation and eCommerce platform marketing experience.

Cashflow: In the reported quarter, there were cash outflows of around AUD 759K from operating activities including payments for research and development (AUD 125K), product manufacturing and operating costs (AUD 427K), advertising and marketing (AUD 44K), and staff, administration and corporate costs (AUD 742K). On the other hand, the financing activities generated cash inflows of AUD 188K during the period. As at 30 September 2019, OPN’s cash balance amounted to ~AUD 1.52 million.

The company anticipates a jump in revenue in the upcoming quarter as the company

• Expands its customer and revenue base in Australia and China
• Incorporates the QBID business and
• Intends to drive online sales in China, with a keen focus on the Singles Day on 11 November 2019.

OpenDNA recently presented at the TechKnow Invest Conference. The presentation highlights may be READ here.

Stock Performance: OPN’s market capitalisation is ~AUD 9.54 million. On 1 November 2019, OPN stock settled the day’s trade at AUD 0.035 while it has delivered a positive return of 6.06% in the last one month.

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