Other infant formula manufacturers are also offering premium products, not just A2M. So paradoxically, the competitive pressure actually would become more intense as people get richer in China instead of the other way around.
You need to understand that the market dynamics in China are significantly different compared to when A2M had just started becoming popular. Back then, infant-formula brands—particularly Chinese domestic brands—offered only cheap products. That subsequently caused a gap in the total-addressable-market which had allowed international brands to establish themselves, with A2M being one of them.
Nowadays, things are way different in that every brand is now offering its own premium products. So essentially the premium "moat" that A2M had enjoyed in the past no longer exists.
You also need to understand that infant formula occupies a very specific category of consumables that is only consumed by babies. Each baby only consumes a certain number of tins regardless of the wealth of the parents. So when A2M can not increase the number of cans sold, then the only other way that, at first glance, seems possible for it to grow its revenue is by increasing the price of its products. But even that is impossible when you take into account the increasingly fierce competition that exists.
In other words, there is no way that A2M can ever grow again without massive increase in marketing spending in marketing or/and introducing a completely new product.
As for the US market, I think people can forget about it. At present, the growth in sales in the US has been very slow.
A2M Price at posting:
$7.38 Sentiment: None Disclosure: Not Held
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