china announces three child policy, page-35

Social mobility is alive and well in China, but it has zero effect on A2M's sales figures.This is because the sales figures rely heavily on the number of cans of formula sold, or specifically to A2M—the number of babies being born each year to couples belonging to middle-class cohorts and above.

The couples belonging to those cohorts are failing to replace their own population, in other words—each couple produces significantly less than two babies on average, statistically speaking.

As long the number of babies being born annually remain suppressed, it is mathematically impossible for A2M to increase its sales figures when only relying on its sales of infant formula to China. At least as long as Chinese domestic brands and other international premium brands maintain their market share in China.

The are only two ways for A2M to grow: penetrate into new markets or gain market share in expense of its competitors. At the moment, however, A2M is doing neither.