Yep, the positive news keep coming, things are looking up!Green...

Yep, the positive news keep coming, things are looking up!

Green light for China jab could revive daigou


Carrie LaFrenzSenior reporterUpdated Oct 11, 2021 – 2.45pm,first published at 2.44pm

An unintentional result of Australia approving the Chinese jab Sinovac for international travelhas been a flurry of positive chatter on platforms such as Weibo and WeChat, which could help to revive the sidelined daigou channel.Many brands have suffered over the past 18 months due to the borders being slammed shut during the pandemic, but the improved sentiment suggests Chinese travellers and students will once again buy products like a2 Milk baby formula, supplements, vitamins and skincare brands such as Mecca, Aesop and Jurlique when they return to Australia.The Common Good’s Jeremy Hunt says it is good news that China’s vaccine has been approved for international travellers, which may help the displaced daigou sector. Arsineh HouspianIvy Yao is a director of China-Australia Pavilion, a large free trade zone company based in China that sells many household brand names ranging from a2 Milk and Nutura to Blackmores to the public.Ms Yao said the approval of the Chinese vaccine for travellers will potentially build more confidence for Australian exporters and brands.“This move may allow for sales in the e-commerce and daigou channels to gain traction as more Chinese tourists and international students come back to Australia,” she said.RELATED QUOTESA2MThe A2 Milk Company$5.880 -2.33%1 year1 dayOct 20Jan 21Apr 21Oct 215.00010.00015.000Updated: Oct 11, 2021 – 7.16pm. Data is 20 mins delayed.View A2M related articles BKLBlackmores$96.525 1.38%Oct 20Jan 21Apr 21Oct 2160.00080.000100.00AdvertisementJeremy Hunt, who runs The Common Good, which helps Australian brands enter China, said while the daigou supply chain is still broken in that local merchants continue to have issues selling stock such as a2 Milk Platinum formula, the vaccine approval means the traditional channel may be revived.He said many daigou have moved to selling on social e-commerce platforms such as Pinduoduo and Douyn (TikTok in China), but companies should still keep serving these important partners.Social power and influence“A2 Milk should not stop servicing this route to market, and education remains important as daigou still have that social power and influence within the Chinese community,” Mr Hunt said.Mr Hunt added the daigou are still feeling aggrieved by the way they were treated last year, when they were forced to take on inventory after the borders were closed so that companies such as a2 Milk could hit sales targets.“That said, there is still demand in China for these brands like a2 Milk,” he said.AdvertisementA2 Milk over the past financial year has posted four downgrades, revealed more than $NZ100 million in provisions for old stock, and launched a review of its China business.The group was hit by a big fall in cross-border English-label baby formula sales via the daigou and e-commerce channels last year.A2 Milk CEO David Bortolussi said in August there were signs of price stabilisation in the cross border e-commerce channel and some recovery in the daigou area, but he warned there was old stock still with wholesalers, which he hoped would clear by the 11/11 Singles’ Day shopping festival.RELATEDA2 Milk denies misleading market, vows to defend legal actionFormer CEO Geoff Babidge handed over to MrBortolussi in February. Long-serving head of Asia Peter Nathan exited the business in May.Share sales by five senior executives and the chairman in August 2020, ahead of the group’s initial downgrade, have also been questioned.The corporate regulator is understood to have been monitoring the directors’ trades but has not raised particular concerns or launched an active investigation.A class action against a2 Milk was launched in early October by Slater + Gordon. It alleges that the $4.7 billion company engaged in misleading or deceptive conduct and breached the Corporations Act and continuous disclosure rules in posting four downgrades from August to May.