DON'T PANIC A2 HOLDERS, YOU ARE IN A BETTER SPOT THAN MOST, page-348

Wanted to write such post for some time. Well, finally managed.
I see emotions are running high currently and I understand people frustrations. However, it seems there are some misinterpretation and misunderstanding of the situation and sometime just deliberate misrepresentation of the facts.
I don't pretend to be some sort of expert who knows better or knows it all, but nevertheless, as I have been doing research on the company and everything related to it's business for quite some time I want to share some of my thoughts.
First, little bit on what I think of some other poster's thoughts.
- There was a claim that daigou do not sell a2 products because of high currency exchange rates which is squeezing their margin. Well, it might be very try for a2 company itself as they set their prices for China in USD and would need to convert it into NZD. However, daigou/resellers do not trade in USD, they buy in AUD and sell in CNY and AUD/CNY exchange rate haven't change that much, in fact it was quite favorable at some times. So, I do not believe exchange rates have to do anything with it.
- Birth rate. A favorite topic of some certain poster. Well, yes, there is a trend of declining birth rate in China. However, first of all, 10 million newborns last year are preliminary numbers of officially registered at the end of the year, the final figures will only be available next month and expected to be around 12,5 millions (https://qz.com/1970321/the-number-of-newborns-in-china-fell-15-percent-in-2020/). Also it appears it's not uncommon not to register newly born at all. However, even that is not the major point. Main point is that a2 IF/nutrition (Stage1,2,3,4) addressable market are children up to age of five and even older. Currently in China ~80 million children of that age group, this is three times of population of au and nz combined. Also, declining birth rate is even bigger concern for ccp. So, I say let them to handle that problem. Already there are talks about removing any restrictions on number of children in families in China.
- Management's reliance on daigou channel and build of formal China channel. I'm surprised that some here don't even know that a2 has a formal channel in China (selling through MB stores) and that in the last HY they managed to sell through that channel more than through the other one. And no, management did not come with the idea of relying on daigou channel. It's just happens that a2 has the right product for the chinese market and daigou/resellers were happy to participate in its distribution.
And here I want start second part of my post about daigou channel and why (in my view) it is in trouble at the moment.
First of all, I think it's wrong to see the daigou channel as a single channel. To me it looks like three separate formations which might intersect with each other but have their own issues.
1. Daigou as it is. Daigou is actually is someone who is buying goods on behalf of somebody else. They don't buy anything unless they received an order and usually are based in the county of products send from. They usually have establish cycle of customers, which of cause they will try to expend.
2. Students/tourists. It speaks for itself, usually opportunistic shopping for relatives, friends, established cycle of customers.
3. Resellers or corporate daigou if you wish. They are effectively un-official distributors, buy bulk, sell on internet or where they can to whoever will buy.
Now, to understand the issues that are happening in these channels you need to understand chinese culture:
- Trust. You can google on this topic but in short summary chinese people don't trust anyone outside their cycle (guanxi).
- Superstitions and believes. I myself from the culture where superstitions and believes are very strong even if they are proven to be not true. So, I understand that.
and I 'm still not confident about
- Logistics
- Pantry stocking
So, how do these affect "daigou"? Many chinese would buy only from trusted sources like those daigou they trust or family, friends (students, tourists). Having it from someone on internet will not cut, they need assurance from someone they trust that the can they will receive was sold in australian woolworth and was not tempered with. With borders closed those who relied on students, tourists might try to find other options.
There is very strong believe in China now that the virus can be spread via parcels from overseas. This one will hugely affect daigou and resellers. You can give any guaranties or assurances you want, but if someone believe in virus in a parcel there is no way they will make an order from overseas.
Logistic issues do not help either. it might be better now but when delivery time increased from a week to a month or longer many would think again.
Pantry stocking - I think this one might be underestimated. I've seen panic buying in my life quite a few time. Have you seen toilet paper hoarding in au recently? Well, you have seen nothing yet. I've seen people buying few life time supplies of all kind of goods and products and this is not pretty. I would suspect pantries were stocked upto at least a year supply or longer.
Now, a2 management can't do much about first two daigou and students/tourists. But it should get better once vaccine get rolled out and borders are opened. To what extend these two will recover hard to say because market is not static. So, a2 might need to prepare itself to adjust their products. And It seems they can only try to manage and stimulate resellers (corporate daigou) and this is what they are doing from the look of it. How successful they are in that we will find out soon, I guess.
Just some of my random thoughts. I was trying to make it as short as I could