Bubs signs major deal with leading Chinese e-commerce platform
Written on the 8 June 2018 by David Simmons
Bubs Australia (ASX: BUB) has partnered with leading Chinese e-commerce platform Alibaba to sell its products on the Tmall Global store.
Alibaba has 580 million monthly users across its different apps, with mother and baby products the second largest category on Alibaba, spearheaded by infant formula.
Bubs expects the Global Merchandise Value to be in excess of approximately $1 million in the first year of trading.
This is a major deal for the Australian infant milk formula producer and is expected to give them a larger footprint in China, according to founding managing director of Bubs Australia Kristy Carr.
"Alibaba is one of the largest retailers in the world," says Carr.
"This is therefore an important milestone in the evolution of our cross-border e-commerce strategy that will significantly broaden our reach to Chinese parents."
Carr says the group's unique market position and product offering will be a massive advantage when competing on the Chinese platform.
"As the only Australian vertically integrated producer of goat milk infant formula, we will be in a unique position to offer Chinese parents comfort that we have complete control over the quality and scalability of our supply chain back to the farm gate," says Carr.
"With this solid foundation in place, and with the support of the Alibaba team, we believe we are well positioned to establish a popular Flagship Store on Tmall Global."
The company has also made a significant step toward getting its product ready for the Chinese market after entering into a deal with Australia Deloraine Dairy (ADD).
ADD is one of only 15 licenced facilities in Australia authorised by Certification and Accreditation Administration of the People's Republic of China to produce infant formula products eligible for importation into China.
Bubs Australia chairman Dennis Lin says this is an important step to getting its products into China.
"This strategic partnership is a crucial step in achieving China Food and Drug Administration (CFDA) registration, enabling us to advance our China expansion strategy," says Lin.
"There is an increasing demand for goat milk based infant formula in China, especially in Mother and Baby stores. The Manufacturing Agreement will facilitate our CFDA registration and provide a defined pathway to maximising Bubs' access to 80,000 stores aligned with our partner QuanJaiWanPu, China's largest nationwide distributor of infant formula."
Business News Australia
Author: David Simmons