Transcription of Finance News Network Interview with eCargo Holdings Limited (ASX:ECG) Chairman, John Lau and CEO Chris Lau
Hi I’m John Treadgold for the Finance News Network and joining me from eCargo Holdings Limited (ASX:ECG)
is the Company’s Chairman, Mr John Lau and CEO Mr Chris Lau. Gentlemen welcome to FNN.
John Lau: Thank you.
Chris Lau: Thank you.
John Treadgold: Mr Lau, congratulations on today’s listing on the ASX. Now your Company operates a one stop solution for fashion retailers and international brands, looking to sell their wares into the immense Chinese online shopping marketplace. Can you tell us about your unique combination of infrastructure, logistics and marketing?
John Lau: eCargo has developed a full range of services to facilitate E-commerce trading in China, comprising of E-commerce IT, front-end, the middle-ware and the back-end of technology and systems. E-operations, managing stores, brand size stores in China as well as stores in the marketplaces, such as Tmall and other marketplaces in China. E-support, we call it E-support service it’s all the production services that we can provide, particularly our studio - videos and stills and models for photography. E-marketing is where China is particularly strong, in social media for the netizens. So we have a special division looking after social media and marketing, and E-fulfilment and DC operations. And for the stock of each and every brand and deliver them to their final consumers.
John Treadgold: This deep knowledge of Chinese culture and logistics is a key service. Can you tell us a little bit about the Company and the Group as a whole?
I myself started up a company called Cargo Services Far East Limited for about a quarter of a century. And we have been very much focused on what is called, retail supply chain and retail logistics. And that is why Australia has been my first international market. We started servicing Woolworths Limited (ASX:WOW)
as soon as we started the company back in 1990. So we can be considered as very strong in the supply chain and logistic services from China, as well as the whole of Asia, to Australia, to UK, Europe, Middle East, South Africa, South America and North America.
John Treadgold: Chris, how many merchants do you actually serve?
Chris Lau: Thank you John. We currently have 28 merchants, 10 of those are what we consider Tier One merchants and 18 of those are Tier Two.
John Treadgold: You offer your merchants both a storefront as well as logistics, but where do you derive revenue?
John Lau: We derive revenue from all our services. From E-commerce IT, we have fees for setting up sites in marketplaces as well as our own brand site. E-operations, where we get a regular income and for deploying dedicated store management teams to our merchants. And then sales commission from the sales that we are able to generate, for the merchants. And then for production we charge fees for photography, for E-marketing and social media activities. Of course, there will be charges for each and every item of activities. And then for E-fulfilment there’s rental, there’re storage fees as well as handling fees of products and distribution fees. So each and every service would carry a charge to the merchants.
John Treadgold: This listing was aiming to raise $30 million. Are acquisitions a key focus for growth?
John Lau: Yes that is one of our primary objectives of raising funds from ASX, to enable us to fund target acquisitions to beef up the services that we can provide to the merchants.
John Treadgold: When will the Company reach breakeven?
John Lau: In our own budget we expect 2015 to breakeven and thereafter, we expect we will be having very good bumper years ahead.
John Treadgold: Looking forward, how do you see the future of eCargo for the next 12 to 24 months?
John Lau: As everybody expects, China’s online businesses are still unchartered waters, despite the fact that it’s now already the biggest online market in the world. I think there was a consultant’s report which predicted by 2020, the one online market in China will be equivalent to the summation of the next five, which are the USA, UK, Japan, Germany and France. So you can see the potential of that online business in China. And we are in the enabling business to bring international brands and retainers to trade, and grow in the China market.
John Treadgold: Excellent, a lot to look forward to. Gentlemen thank you for speaking with FNN.
John Lau: Thank you very much John.
Chris Lau: Thank you John.