I almost wanted to write an essay, but let me try to be very brief here:
1. The success of A2M is largely due to its popularity among Chinese consumers and its future growth potential in the Chinese market.
2. The reason why Chinese prefer A2M, BAL and many other foreign baby formulas is due to their lack of trust on local brands.
3. I have no intention of arguing the nutritional benefits of A2 products over other products, which I personally believe. But dare I say, the popularity of A2 has more to do what consumers "believe" and not much to do what you can prove in labs.
4. If you agree with the above, you notice the keyword here is trust, or belief.
5. Then the rest of argument is easy. No matter how hard Nestle tries, most Chinese consumers who choose imported baby formulas won't link Nestle with premium products.
6. Why? Because Nestle has been in the Chinese market for too long. It is more of an everyday brand to many Chinese consumers, instead of a premium brand nowadays.
7. If you ask your Chinese friend what their impression is with Nestle products, I guess a lot of them will say industrialized and mass-produced. What's impression with A2? Pristine.
8. I know, this probably does not stand scientifically. But consumer behavior is not always rational.
9. Investors and institutions in western countries still have a lot to learn about Chinese market. Fortunately, the senior management team of A2m is doing extremely well on this one.
In A2M we trust!
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