Bubs Australia appears to be turning corner in key China goats milk infant formula market
Bubs Australia has encouraging news in the key China sales market for its infant formula market. See the latest.
Goat milk infant formula manufacturer Bubs Australia may be back on track in making sales into the key Chinese market.
Releasing its third quarter results today, the company said the daigou sales channel into China was now only 15 per cent lower than what it was a year ago when the coronavirus pandemic erupted.
Bubs founder and chief executive officer Christy Carr said the company reactivation of the daigou channel was one of three priority areas identified at the half-year mark.
The other two were expanding Chinese cross border e-commerce sales and increasing growth in the infant formula category, the highest and best use of the company’s goat milk pool.
Ms Carr said Bubs now had significantly more retail outlets stocking the company’s products in Australia, but was also increasing sales into China, while building its presence in Malaysia and Vietnam.
It was also registering products in South Korea and Singapore, with the first shipments due in both markets before the end of June.
“Out daigou channel sales continues to show growth of 19 per cent quarter on quarter, with Bubs infant formula the mainspring, growing at 38 per cent quarter on quarter,” she said.
“Despite no change to international boarder closures, the daigou channel is now only 15 per cent down compared to the prior year — versus a 55 per cent decline in the previous corresponding period in the second quarter — although there remains high volatility in the channel.”
Bubs recorded revenue of $12.2 million for the third quarter, but this ended up with a net deficit of $3.8 million after costs were deducted.
It still had cash reserves of $36.3 million, sufficient to fund the business for three years, based on net cash used in operating activities.
Shares in Bubs Australia fell 2.5 cents to 41.5 cents in trading on the Australian Securities Exchange today.
Peter Hemphill’s family holds shares in Bubs Australia.
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