SmartTrans Holdings Limited (ASX: SMA) has signed a Collaboration Agreement with Chinese online-to-offline (O2O) operator, KGT, which operates an O2O store network across four provinces in northern China.
According to SmartTrans Managing Director Brendan Mason, the collaboration is a significant step towards scaling up SmartTrans’s China-focused e-commerce operations.
Mr Mason says KGT’s O2O model draws potential online customers to visit a physical (offline) store but delivers their purchases to the customer using eCommerce fulfilment (online) processes.
“We see personal shoppers – ‘Daigou’ – increasingly losing any cross border advantage as Chinese tariffs on many imported consumer goods are reduced or removed altogether,” Mr Mason said.
“This situation makes purchasing through offline or eCommerce stores ever more competitive. Even with Chinese consumers’ well documented love for online shopping, we are witnessing a growing desire to engage, hands-on, with products prior to purchase.”
According to M Mason, O2O offers the chance for deep consumer relationships and brand-building since it provides opportunities for customers to physically interact with products before making their purchasing decision.
“The O2O model is applicable for all SmartTrans’ current products sold through existing eCommerce channels. Samples of SmartTrans’ cross border products can be displayed in-store and when a QR code is scanned (with a smartphone), it will initiate the distribution process, with goods being shipped directly to the buyer’s home from Australia or from SmartTrans’ warehouse in China.
“O2O complements SmartTrans’s other services currently offered to Australian brands in China. These include SmartTrans’s trademark IP protection services, and services to assist with registration with the China Food and Drug Administration (CFDA) and with China Inspection and Quarantine (CIQ),” he commented.