RooLife Group Secures $64M Coffee Deal to Brew Growth in China

Strategic Expansion into China’s Coffee Market

RooLife Group Ltd (ASX – RLG) has taken a significant step to deepen its footprint in China’s burgeoning coffee sector by finalising a binding two-year supply and procurement agreement valued at approximately AUD 64 million. The deal with Zhongshan Runlian Commercial Co., Ltd marks a strategic extension of RLG’s data-driven e-commerce model, which prioritises rapid market entry through high-margin branded products.

China’s coffee consumption has been on a steep upward trajectory, growing at an impressive 21% annually since 2011, far outpacing the global average. Despite this growth, market penetration remains relatively low, presenting a ripe opportunity for RLG to establish its RLG Coffee brand across both online and offline channels.

Leveraging Established Supply and Distribution Networks

Central to RLG’s approach is a multi-supplier sourcing strategy that balances volume security with quality flexibility. The company has secured supply commitments from COFCO, a major Chinese state-owned food conglomerate, which will provide around 70% of the coffee beans. Complementing this are partnerships with Shanghai Baorong International Trade and Suzhou Xiangchen Coffee Trading, which supply specialty and diverse coffee bean profiles.

On the distribution front, RLG is capitalising on Zhongshan Runlian’s extensive wholesale network and Eternal Asia Supply Chain Management’s national retail footprint. This partnership is designed to accelerate volume sales and facilitate bundled offerings, including coffee machines and subscription programs, to build recurring revenue streams.

Execution and Market Positioning

RLG’s model hinges on data-driven identification of demand and swift deployment of branded products. The company has already launched its proprietary coffee range on prominent Chinese e-commerce platforms such as JD.com, Tmall, and Douyin, while also preparing for offline sales through established retail channels.

Payment terms under the agreement require a 50% deposit on monthly orders, with the balance due within seven days of delivery, reflecting a structured and secure commercial arrangement. Additionally, RLG and Zhongshan Runlian will jointly promote the RLG Coffee brand at the upcoming Food2China Expo in Guangzhou, signalling a concerted push to raise brand awareness and market share.

Implications for RLG’s Growth Trajectory

This agreement aligns seamlessly with RLG’s broader strategy of leveraging digital consumer platforms and supply partnerships to penetrate high-growth verticals in China. By focusing on coffee, a category with strong growth fundamentals and relatively low current market saturation, RLG is positioning itself to capture a meaningful share of a market forecast to exceed US$20 billion by year-end.

While the deal provides a solid foundation, the company’s success will depend on its ability to scale operations, maintain supply chain reliability, and effectively compete against established coffee brands in China’s dynamic market.