RooLife Group’s Strong Business Model Enduring Temporary Market Headwinds

e-Commerce and digital marketing company, RooLife Group Ltd (ASX: RLG), formerly OpenDNA, has released Australia and China Digital Marketing and e-Commerce Update, providing a quick overview of its current business activities, impact of coronavirus epidemic and the outlook ahead.

RooLife, powered by its hyper-personalisation Artificial Intelligence (AI) System, helps businesses to boost online sales of their products and services, particularly those companies that have Australia and China-focussed sales strategies and enable payment processing via the WeChat and Alipay mobile payments platforms. Presently, the Group is experiencing strong growth in customer and revenue base on the back of expanding international application, and high demand from brands & clients seeking to strengthen their Chinese market positioning.

Coronavirus & RooLife

The Coronavirus (COVID19) outbreak has impacted supply chains and manufacturing operations around the world, and some RooLife managed e-commerce platforms are witnessing a slight decline in product sales due to supply chain/logistics delays. Even then, certain other sales platforms and products are seeing sales increases over the prior month. Specifically, online activity and searching of RooLife brands associated with health products has considerably gone up.

The Group has taken up thought leadership and authority role with its clients and prospective clients and expects delayed sales to recuperate as logistics/supply chains eventually return to normal operations.

Chinese Online activity Surges up ~22%

China e-Commerce Market: It is interesting to note that e-Commerce accounted for ~ 35.3% of total retail in China (eMarketer, 2019) prior to the upsurge of COVID19. Now, with a significant number of people quarantined at home (760 million in February (NY Times, 2020), China’s online activity has gone from 5 billion screen hours to 6.11 billion hours in 10 days from 23 January 2020 to 3 February 2020 (QuestMobile, 2020).

Thus, e-Commerce is experiencing a boom of sorts, particularly social e-Commerce platforms (like Xiaohongshu, Douyin, etc.), as bored house-bound consumers continually seek entertainment and social engagement to enhance their shopping experience.

Market Opportunity for RooLife: In the current circumstances, as people spend more time at home, shop online and seek more products from outside China, there exists a great opportunity for RooLife Group to capitalise on the same. The Coronavirus epidemic will pass and the companies preparing now will be best positioned to benefit the most.

Good Read: Roolife Group Tapping Rising E-commerce Opportunities in Australia And China

Financial Performance: RooLife recorded revenues of $ 550k in Q1 FY20 (JUL – OCT 2019) and $ 1 million in Q2 FY20 (SEPT – DEC 2019), maintaining a solid revenue profile built on a mixture of both digital marketing and product sales in Australia and China, supported by a pipeline of mature prospects for the year ahead.

Read: RooLife Reports 78% Revenue Growth For December 2019 Quarter & Expanding Business Partnerships

q1fy20 revenue half year revenue

Source: RLG Australia & China Digital Marketing & e-Commerce Update

2019 Review: The Group signed some of the key deals in 2019, that continue to deliver revenue in 2020.

  • Perth Airport for Duty Free Shopping in Australia and direct sales to China.
  • Frasers Property – Digital Marketing & Online Customer Acquisition.
  • Addition of QBID (Quality Brands International Direct) Client Base and Digital Marketing capability in China.
  • Strong portfolio of brands being sold into China.
  • WeChat and Alipay Payments Deal with WA tourist destination Lobster Shack.
  • China Distributor appointed for RooLife’s Artificial Intelligence (AI) and Machine Learning technology for eCommerce recommendations.

Consequently, Roolife has been successful in rapidly building Multiple Revenue Streams & Verticals for its business, including:

  • Digital Marketing & Services in Australia & Internationally.
  • Digital Marketing & Services in China.
  • Annuity Licencing & Retainer Fees.
  • Royalties/Commissions on product sales in China & Australia.
  • Transactional Revenue through various payment Gateways.

The Group is especially focussed on opportunities in high-demand market segments such as tourism, Skincare, Supplements, Vitamins, Minerals, Health & Wellbeing as well as AI in China.

RLG Australia & China Digital Marketing & e-Commerce Update

Source: RLG Australia & China Digital Marketing & e-Commerce Update

In China, RooLife delivers wide and diverse reach online with multiple e-Commerce platforms and products as given below.

RLG Australia & China Digital Marketing & e-Commerce Update

Source: RLG Australia & China Digital Marketing & e-Commerce Update

e-Commerce Engine Daishu: e-Commerce businesses must sift through Big Data to elevate their online presence and promote products and services up to the customers’ expectations. Roolife comes as a saviour and enables companies to conveniently collect and process data in real time, then create hyper relevant insights that can be used for customer acquisition and delivering improvement in online traffic and sales.

RooLife’s collaborative filtering-based Recommendation Engine Daishu, having strong e-Commerce applications, suggest products to the user and highlights offers that others, similar to that user, have previously purchased or redeemed and therefore carries the highest propensity for the user to engage with. As the user continues to use the service, the recommendations get refined over the period as they are associated with a tighter, defined user group.

Good Read: RooLife’s Position in the Thriving e-commerce and Digital Marketing Landscape

Despite the recent developments in China and a challenging business landscape, RooLife Group is operating in strong growth sectors, i.e., digital marketing and e-Commerce with a good mix of stable recurring revenue streams and commission-based product sales, and estimating revenue for the March Quarter 2020 is to be broadly in line with the Group’s last reported Quarterly Revenue of ~ $ 1 million.

Stock Information: Roolife has a market capitalisation of ~ $ 7.83 million and ~ 340.62 million shares outstanding, the RLG stock is priced at $ 0.020 as of 2 March 2020.

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is sponsored but NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. We are neither licensed nor qualified to provide investment advice through this platform.





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