A2M (ASX) Chart Update

Originally posted by CarlosG: ↑

For the 6 month from 9/20 to 2/21 China Feihe offline market share grew 0%
their online market share at the same time grew ~1% with a big drop in November which coincide with biggest online sales event 11/11, Also November is a month with the biggest sales of IF during a year (see below, that data from 2017 but I would guess will be similar to other years).
So, I would not be so sure Feihe was gaining to much share during the last 6 month

One more note. Domestic brands dominates the lower-tier market. And in this market Feihe is number one. However 1st and 2nd tier dominated by foreign brands. But market share of lower-tier cities is growing and I think this is where a2 need to expend and rather quickly.

"The biggest advantage of most domestic brands is their ability to organize channel services in lower-tier cities. An important fact is that in the past two years, the birth rate in China has been declining, and the number of newborns in third to sixth tier cities accounts for 80% of all births. The market of lower-tier cities accounts for nearly 60% of China’s infant formula market [3]. At a macro level, growth in China's infant milk powder market is currently stagnant. However, third and lower-tier cities, have faster population growth and greater demand for infant formula consumption. In these cities, domestic stakeholders are dominating."

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Hi Carlos,

Great research.

I read an article which I can’t locate right now where it says the Chinese govt is adding further free trade exclusion zones in the 3rd to 6th tier cities to allow the CBEC websites to sell English label products in these cities.

I think this would be the circuit breaker for A2 milk to market and sell their products in these cities in tandem with their MBS rollout of physical outlets.

Also, I have also noticed A2 has setup an A2 mother & baby flagship store in Tmall selling Chinese label product. This online store must be the intermediate distribution network whilst the physical outlets build up in these cities.