The changing shopping preferences of Chinese parents and tighter competition is forcing baby formula business A2 Milk to seek out new ways to survive the headwinds.
The once-highly lucrative daigou market of Chinese shoppers buying and exporting infant formula is in the rearview mirror for A2 Milk, as the company continues to navigate around COVID-19 disruption and China’s declining birth rate.
A2 Milk on Monday revealed double-digit increases in net profits, earnings and revenue for the 2023 financial year. However, it also pointed out ongoing shifts in consumer habits in its core market in China, as parents move away from English-label baby formula in favour of Chinese-label products .
“There [are] a lot of things that are conducive to a daigou recovery. Unfortunately, we’re not seeing a significant rebound in that,” Bortolussi said. Amid a relatively tight labour market, Bortolussi said Chinese international students had plenty of options other than daigou shopping to supplement their income while studying in Australia. Meanwhile, Chinese parents were also increasingly opting to buy their infant formula online and in-store.“I can be reasonably definitive about that: [the daigou channel] will not get back to the same size that it was,” Bortolussi said.
The $3.9 million company has changed its daigou strategy a number of times: in late 2021, A2 Milk signalled it would
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