BKL Bad News Looming???, page-87

You need to understand the China mindset and how things are done there to understand why Blackmores and other Australian brands will always receive a premium - especially if can be sold through official channels.

Living in Hong Kong, and married to a Chinese wife for the last twenty years, gives me some insights into the psych of the Chinese consumer.

Mainland Chinese come to Hong Kong in droves, with suitcases which are dragged around the streets, to buy authentic health related products. A train from LoWu (Shenzhen) into HK costs about A$0.50c and takes about 6 minutes (to the closest shopping centres). Chinese flood in here daily to buy the products as they trust they are real. They pay more for them here than in China, as the premium is worth it as the risk of being fake is greatly reduced. I am not talking about a few old ladies strolling in, but thousands and thousands of them flooding in, sometimes up to 5 or 6 times per day.

The Tmall and Weibo sites, which now promote official Blackmores stores will eventually get the trust (as goods are shipped and supplied by Blackmores Australia), but the courier trade of people coming over the border accounts for huge volume and should be understood.

From my understanding the major selldown earlier this year, which is yet to subside was due to possible change to regulations prohibiting certain suppliers from selling in China. That, according to news reports has now passed and is no longer a concern to Blackmores, so the forced selling by vendors and suppliers dumping stock in case of a ban is history and the sales should be increasing again.

Happy to hear from others who disagree, or agree.