Bubs signs deal with the largest baby retailer in Vietnam
Written on the 11 November 2019 by Business News Australia
Infant formula business Bubs (ASX: BUB) has secured placement in Vietnam's largest baby goods chain store Bibo Mart.
The deal will see Bubs' products distributed to over 135 stores, predominantly located in major metropolitan areas.
Placement in Bibo Mart will allow Bubs to enter the $2.2 billion Vietnamese infant nutritional market, with the infant milk formula category valued at $1.8 billion alone.
As part of the deal Bubs has signed a distribution agreement with Viet Nam TVV Service and Trading Company (TVV), one of the largest Vietnamese owned distributors in the country's infant nutrition industry, distributing to around 20,000 retail outlets.
"This new partnership with TVV and ranging in Bibo Mart marks the achievement of another milestone for the Bubs' business, expanding our Asian footprint in one of the region's fastest growing markets in the infant category," says Bubs founder and CEO Kristy Carr.
"We are honoured to be partnering with TVV's team and draw on their experience within Vietnam's infant nutrition category, as well as being selected for ranging across the Bibo Mart store network, which is well-known as the country's flagship baby retailer."
Bubs estimates the revenue to be generated from the deal with Bibo Mart will be around $1.5 million in the first year, growing to at least $2 million by the second year.
TVV founder and CEO Van Ngo says the distributor sees significant potential in the Bubs brand in Vietnam.
"This is an important opportunity to partner with Bubs Australia given the impressive quality and depth of their premium nutritional range," says Ngo.
"We particularly see enormous potential in Bubs goat milk infant formula for the Vietnam market."
The deal with Bibo Mart is the second milestone in the last week for Bubs. The company announced last week that it intends to target adults in China as potential consumers for a new line of goat milk products.
The company is poised to launch a new premium adult goat diary brand 'Deloraine' with Alibaba in China.
Bubs and Alibaba CIP expect to ship RMB50 million (AUD$10 million) worth of adult goat dairy products such as Deloraine and CapriLac in year one, but overall the total market is estimated to be worth RMB10 billion (AUD$2 billion).
Shares in Bubs are up 4.67 per cent to $1.12 per share at 10.56am AEDT.
Business News Australia
Author: Business News Australia