eCargo Launches IPO, Set to Power China's Burgeoning eTailing Industry

SYDNEY - Sept. 19, 2014 - PRLog -- eCargo Holdings Limited (“eCargo”), a provider of eCommerce solutions for retailers and fashion brands, today announced an initial public offering on the ASX. The Offer will capitalise eCargo at A$224 million and position eCargo for growth in its primary markets of China and Hong Kong, as well as future expansion in Australia, the UK and Europe.

The eCargo business is structured as an important service provider to China’s eTailing industry, acting as a ‘one-stop’ enabler for branded manufacturers and retailers ("Merchants") seeking to sell their products online to gain exposure to China’s online consumers by providing integrated online and offline supply chain solutions.

Companies providing eTailing support services to retail Merchants account for 10 to 12 per cent of total eTailing revenue1 globally. eCargo is ideally positioned to benefit from the anticipated growth of the eTailing sector in China and across the Asia-Pacific. The Asia-Pacific region is already the world’s second largest eTailing market with estimated revenues of US$563.28 billion in 20142.

Underpinning the Asia-Pacific sector is a Chinese consumer market with the world’s largest online and mobile population. In China, consumer spending is tipped to grow from US$2.03 trillion in 2010 to US$6.18 trillion annually in 2016, representing a threefold increase3. eCargo believes it is the only company providing the full spectrum of services to Merchants who wish to enter the Chinese online consumer market.

eCargo Chairman and Founder John Lau is highly regarded among retail and logistics industry leaders in China and internationally. Over the past 40 years, he has built one of Asia’s most successful international freight forwarding, supply chain and logistics services groups, CS Logistics Holdings Limited.

In Australia, John Lau and Christopher Lau, Chief Executive Officer of eCargo, are well known by many of the nation’s leading retailers, through their work with Cargo Services Far East, an operating arm of CS Logistics. Both John and Christopher respectively have worked alongside major household names in Australian retail and fashion, including BCF, BIG W, Breville, Bunnings, Dan Murphy’s, Esprit, Forever New, Harris Scarfe, Jeanswest Australia, Kathmandu, Masters, McPherson’s Consumer Products, Myer, Rebel Sport, Smiggle, Supercheap Auto, The Reject Shop and Woolworths Supermarkets, powering their international supply chain expansion & sourcing activities.

eCargo has 5 complementary services which comprise a full outsource offering, ranging from eCommerce technologies, marketing, operations and support services to eFulfillment, one of eCargo's key competencies which provides Merchants with inventory management, sales order fulfillment, returns processing and courier management solutions. Those services provide a complete infrastructure for Merchants seeking to establish an online presence in China, by driving scale benefits and supply chain efficiencies.

eCoreOS, eCargo's eCommerce technology platform, is a key foundation of eCargo’s operations. A web-based platform that manages the key operations for Merchants’ eTailing businesses, eCoreOS is already connected to Tmall, China’s largest online retail marketplace, with development already underway to integrate with China’s second largest online retailer, JD.com.

The IPO underpins a new phase of growth for eCargo as it seeks to expand operations initially in China and Hong Kong, as well as capitalise on acquisition opportunities with complementary businesses in China, Hong Kong and international markets, with longer term plans to increase its presence in Australia.

eCargo anticipates significant Merchant growth will come through existing relationships with leading retail and fashion brands trading in the Chinese market. eCargo is already engaged by a number of major fashion Merchants to enable the growth of their online businesses in China and Asia.

The IPO is seeking to raise A$40 million through the offer of 100 million CHESS Depository Interests ("CDIs") at A$0.40 per CDI, equivalent to 100 million shares at A$0.40 per share.

The proceeds of the offer will primarily be used to finance the acquisition of businesses, primarily in China, to complement and strengthen existing capabilities primarily in the areas of online channel operation, technology and implementation, digital and social media marketing and big data analytics and for investment in research and development of new technologies and the enhancement of the eCoreOS eCommerce technology platform.

eCargo Chairman John Lau said: “The IPO is a unique opportunity for investors to get in at the ground floor of a company which has an experienced management team who are able to offer Merchants a turnkey eCommerce solution, and offers direct and rare exposure to the world’s largest online shopping and mobile consumer population, China.

“China is one of the largest and fastest growing eCommerce markets in the world and since 2003 has experienced 120% CAGR, with fashion and apparel being the highest turnover product categories, and eCargo’s primary Merchant customer segments.

“eCargo is strategically poised to capitalise on the growth of China’s eTailing market and the emerging structural shift underway in the behaviour of Chinese
online consumers. China’s online consumers are showing signs of a shift towards better quality merchandise with a strong predilection for high end international brands. This trend is most notable among the more affluent Chinese consumers.

“The explosive growth of eCommerce in China will continue to be underpinned by the combined impacts of the rapid expansion of Chinese ‘Netizens’ for whom online shopping on mobile devices is an increasingly popular pastime, as well as the proliferation of online payment technologies.

“China’s strong macro drivers of eTailing growth are reflected in the Chinese Central Government's twelfth Five Year plan, in which the Central Government in recognition of the significant contribution that the eCommerce sector makes to employment, identified eCommerce as one of the priority sectors for development.

eCargo has a well-credentialed and balanced Board and management team, with extensive experience in eTailing, retail, logistics, shipping, technology, finance and investment industries. The Directors include: Chairman and Founder John Lau; Chief Executive Officer and Co-Founder Christopher Lau and independent Non-Executive Directors Rupert Myer AM, Chris Ryan and Heath Zarin.

The Offer opens on 7 October 2014 and will close on 31 October 2014, with trading expected to commence on the ASX on 18 November 2014. Details of the Offer are contained in the Prospectus lodged with ASIC.

Investorlink Securities is the lead manager of the Offer.

The Prospectus can be downloaded from eCargo’s website at: www.ecargo.com.