(Reuters) - Shares of China-focused “daigou” retailer AuMake International Ltd (AU8.AX) more than doubled in their trading debut on Thursday as investors expect growing demand for Australian products from Chinese overseas shoppers.
AuMake’s shares rose as high as A$0.185, compared with the offer price of A$0.08 per share.
Daigou is a channel of commerce where an entity outside China purchases products for customers in mainland China in a bid to avoid high import duties.
AuMake, which aims to connect Australian suppliers directly with daigou and Chinese tourists, had offered 50 million shares to raise A$4 million ($3.15 million) with the option to raise up to a further A$2 million.
The company raised A$6 million as capital for its debut and intends to expand its Chinese tourist retail network, as well as acquire brands which it believes are popular in China, it said in a statement.
Several manufacturers in Australia and New Zealand use daigou as jumping point into the Chinese market, seeing it as a cheaper method than exporting their goods directly.
New Zealand’s a2 Milk Co Ltd (ATM.NZ), which places informal daigou agents at the heart of its distribution strategy, is one such example. The company logged a record profit in 2017 on soaring demand for its products in China.
Reporting by Ambar Warrick in Bengaluru; Editing by Stephen Coates and Edwina Gibbs