JAT Corp to open first China retail gateway following 12 month COVID delay

It’s been a frustrating wait for dairy products company JAT Corp (ASX: JAT) but the China-focused exporter is set to finally open their first retail store in Shanghai having predominantly relied on distributors and online channels through the pandemic.

Originally set to open in March 2020 as JAT Corp’s (previously Jatenergy) flagship retail store, the opening was delayed due to COVID-19 but is now set to commence trading in March 2021.

The 50 square meter store will be branded JAT Maternity & Infant Boutique where it will offer a full range of JAT’s in-house dairy product brands which are primarily manufactured from their facility in Melbourne. Addressing demand in China for Australian-manufactured dairy products, the store will act as a gateway to a wider Chinese audience where JAT is expecting increased web traffic to their online stores as a direct result of their retail strategy once the store is opened.

Directors of JAT Corp anticipate the store to deliver between $500k – $800k in sales within its first year of operation with plans to also open more stores in Shanghai as well as other cities in China.

The launch of their flagship Shanghai store forms part of JAT’s wider Asian strategy where they are set to increase their distribution network and products over the next 12 months. This includes their entry into the plant-based meats market where the Company last month entered into a 50/50 joint venture with Shanghai Godly Vegetarian to commence production of the meat substitutes in China.

The market into meat substitutes has become particularly attractive to JAT as a result of rising pork prices in China and bans on meat imports. The Chinese Government has further pledged to cut the country’s meat consumption in half by the year 2030.

Subject to import permits and labeling requirements, JAT is in the process of engaging distributors in Korea, Malaysia, Indonesia, Thailand, Jordan and the UAE for their plant-based meat products.

Through their existing distributor network and online sales channels, JAT Corp reported $7.7m in sales for the quarter ending 30 September 2020.