Australian logistics software firm SmartTrans to sell off Chinese e-commerce business

Melbourne-based SmartTrans has divested its e-commerce business in China and will now focus on its core logistics business in Australia.

The company will sell the business to financial technology provider 2WayWorld Technologies for $300,000, plus a transaction expense allowance of $60,000. The deal is expected to be completed this month.

It comes after SmartTrans took Chinese state-owned telco China Mobile to court over the $4 million it says it is owed. The sale to 2WayWorld will not include that debt, or SmartTrans’ other debtors and creditors.

“Our strategic review has highlighted the need to simplify our structure and activities. Our China eCommerce and Australian logistics businesses are best described as ‘unrelated diversification’ with very few synergies,” SmartTrans chairman Nicholas Johansen said.

“We have taken the decision to focus the board’s and management’s efforts to scale up the most attractive business, our Australian logistics operations, where we believe we will add considerable value to shareholders.”

The decision to divest was part of that review, as the unprofitable e-commerce business was an “unattractive sector” and had to deal with “intense rivalry” with competition ranging from the large, well-known, Chinese e-commerce platforms through to low-cost exporters.

SmartTrans added that many other medium-sized Chinese based e-commerce platforms have shut down in the past year as the industry consolidates.

The company will instead focus on its resources, health and transport logistics businesses, citing a mine shutdown maintenance trial and the recently launched Orcoda healthcare logistics division.

In addition to the divestment, the strategic review also involved a number of changes in the board of directors and senior management, including Johansen, who was named non-executive chairman on 29 June.

“SmartTrans is well advanced in resetting its growth strategy,” SmartTrans managing director Brendan Mason said.

“We have a new board, a new management team and some lucrative opportunities where shareholders will gain exposure to a pure play in three attractive logistics segments.”