Dairy producer Bubs Australia (ASX: BUB) has struck a strategic channel partnership with China’s premier baby retailer Kidswant, thereby commencing the inaugural project of its joint venture with Beingmate signed in May 2019.
To mark the occasion, Kidswant staged a launch event at its headquarters in Nanjing to formalise the agreement and show off the new store.
The retailer classifies itself as “omnichannel family service provider” focused on retailing maternal and baby goods and value-added services. Currently, Kidswant is the market leader in infant and child retail with the largest market share in China.
From its establishment in 2009, Kidswant has grown to 275 large-scale physical stores covering almost 60% of China’s urban areas with a population of more than 500,000. The retail giant currently hauls in over RMB10 billion (A$2 billion) in annual turnover, making it the ideal partner to distribute Bubs products.
According to Bubs, its organic food products are now available in all 275 Kidswant stores, located in shopping areas in 123 cities throughout China. As a result of the new partnership, Bubs believes it can achieve an annual retail sales figure of around RMB30 million (A$6.24 million) by the end of the current financial year.
Commenting on the strategic partnership with Kidswant, Beingmate chief executive officer Mr Xiufei Bao said, “The cooperation with Kidswant is the most important project that has been signed and implemented since the establishment of our joint venture company with Bubs.”
Meanwhile, Bubs chief executive officer Kristy Carr said that Kidswant’s store footprint and full-service integrated membership model would provide the company with immediate access to its core potential customers in a “trusted ecosystem”.
One of the primary reasons why Bubs partnered with Kidswant is the extensive access to one of the largest consumer markets in the world, combined with a huge addressable audience that is keen on adopting foreign high-quality products.
Chinese consumer growth
Kidswant operates large physical stores, online shopping malls, a mobile terminal APP among other shopping channels that are all of interest to Bubs.
The Chinese company also provides a parenting and purchasing consulting service with in-store and online professional childcare consultants, aiming to provide consumers with differentiated goods and services – a market segment which is highly complementary to Bubs’ product range.
At the current time, Bubs manufactures a variety of goat milk and organic grass-fed infant formula ranges, organic baby food, cereals and toddler snacks catering for young children.
The dairy producer says it is “engaged in the business of inspiring new generations of happy, healthy bubs” through its range of premium infant nutrition products, made in Australia and entirely based on goat milk.
The company’s products are widely sold in major supermarkets and pharmacies throughout Australia, as well as exported to New Zealand, China, South East Asia, and the Middle East.
This morning’s news helped Bubs’ shares to add almost 18%, to trade at $1.095 by midday.