Bubs jumps 29pc on deal to sell goat formula via China e-mall
Health & Biotech
Health & Biotech
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Bubs Australia jumped 29 per cent on Monday after the infant formula maker announced it would sell its new goat milk product via China’s biggest online shopping portal, Alibaba’s Tmall.
Bubs (ASX:BUB) shares gained 19c to 83c on the news. More than 32 million shares changed hands.
Bubs will sell its goat milk infant formula, organic baby cereal and teething rusks through Chemist Warehouse’s storefronts on Tmall.
Tmall is said to account for more than half of China’s retail e-commerce market.
Chinese demand for Australian infant formula is so high that prices can reach more than five times the local price.
Tmall sells an 800g tin of Bubs’ signature organic infant milk powder for 799 yuan (roughly $150) compared to just $33 in Australia.
Bubs shares are trading six times higher than they were in June.
Meanwhile rival infant formula maker Bellamys has regained all the value it lost — and more — after its shares dramatically collapsed last year on weaker sales during China’s popular November 11 Singles Day shopping event.
Chinese shoppers are now preparing for this year’s Singles Day sales event, in which young Chinese people celebrate their single status.
Singles Day sales exceeded $US17.8 billion last year — of which Chemist Warehouse had the highest sales of any other storefront on Tmall Global.
“We are confident Bubs infant formula will be well received by Chinese parents,” said Chemist Warehouse operating officer Nancy Jian.
“We are excited to be the first Australian retailer to launch Bubs new range of organic baby cereals and teething rusks in Australia and now China, in the lead up to our peak period for Singles Day shopping extravaganza.”
BUB raised $16 million in September at 45c a share and had $18.2 million in the bank at the end of September.