Doing business in China is hard, indeed investing in China is hard as we have seen recently, but here we are talking about direct business in China,

RooLife are facilitators, which is essential in this market. They have recently announced initial revenue from Merino & Co wool garments into China using its e-commerce and digital marketing technology. This provided of over $310k in sales of the Merino & Co products during February. The company expects sales of the Merino & Co wool products will contribute to strong growth in the March 2022 quarter.

Revenue from ordinary activities was up over 300% to ~$8M compared to $2M in H1/21. Cash receipts also were up from ~$1.7M in H1/21 to $5.7M in H1/22.

The higher revenue resulted in a significantly lower loss at approx. 800k getting the business back to break ever.

The company has pointed to the high Merino & Co cash receipts to its partnership with sales channel and strategic investor China Cross Border Trading Group (CCTG), announced in December 2021.

Back in December, shareholders approved a $1 million capital raising via a share placement with CTTG who will “facilitate” RooLife’s portfolio of products to Chinese retailers

During H1/22, RooLife fresh food store was launched on Pinduoduo (a marketplace apparently larder than Alibaba) and put itself in a top 10 position for sales on the platform within three months. Pinduoduo has over 850 million active users.

Bryan Carr, RooLife CEO was recently on Smallcaps if you want to hear more: https://webplayer.whooshkaa.com/show/10156?episode=970544

In the past decade or more I have worked across Asia in Singapore, Thailand, Indo, Malaysia, Cambodia, Japan and of cause China. China was by far the hardest in which to conduct business, even though the market is massive.

Everything requires a middle man with expertise in culture and language. This is where this team comes in, bringing the know-how and contacts. 

With ever evolving regulation this is becoming more important. While the company is tiny if they can continue to build credibility and add value this could really take off.

With the business now cashflow positive, it's on the watchlist. If they can continue to execute I'll be interested.