Shares in the ASX-listed technology group eCargo soared after announcing a joint venture to build a mobile shopping platform to sell more luxury and premium brands directly to consumers in China.
The shares jumped by about a quarter on the news. A short time ago, they were up 20% to $0.36.
The Hong Kong-based joint venture is with Walton Brown (Hong Kong) Limited, a company of the Asia luxury retailer the Lane Crawford Joyce Group.
The joint venture company, WWE & Company, is initially capitalised at RMB300 million ($A60 million). eCargo will invest RMB60 million ($A12 million) for an initial 40% equity interest
The move is a departure from the eCargo model of facilitating the move by companies onto digital retail services to building its own platform.
eCargo says it is committed to WWE becoming a leading social shopping technology pioneer in China. The company expects the social shopping mobile platform, similar to an online shopping mall experience for consumers in mainland China, to be launched in the next 12 months.
The business will be led jointly by Christopher Lau, the CEO and and founder of eCargo, and Thomson Cheng, president of Walton Brown.
China is already the largest eCommerce market in the world.
“We have ambitions to bring the social mobile shopping experience in China to another level, by bringing Chinese consumers more choice to many wonderful international and designer brands,” says Christopher Lau of eCargo.
“Our time is now. The continued proliferation of smartphone and mobile devices in China, which has currently attracted more than 500 million mobile users, supports our mobile-first development philosophy and presents us with a unique window of opportunity to make a breakthrough.”
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