In response to high demand and shortages of its baby formula, Bellamy’s Organic has announced it will increase production. Australia has struggled with shortages of popular baby formula products, including Bellamy’s, due to daigou shoppers. A daigou is someone who buys a product in another country to resell in China.
According to Brian Green, Company Secretary of Bellamy’s Australia, unaudited earnings before tax and interest jumped to $19 million over the last six months of 2015. Unaudited revenue during that time period was $105 million.
Daigou shoppers played a role in the growth of Bellamy’s baby formula profits. They bought so much Bellamy’s organic infant formula that the shelves were empty in many Australian supermarkets. Because of shortages and customer complaints, the supermarkets started limiting the number of baby formula tins a customer could buy.
Before Bellamy’s released information of their unaudited account, shares were trading at $10.45. Shares soon increased to $12.65, a sign that investors anticipate more growth throughout 2016. One reason that investors were excited about the numbers released is Bellamy’s revenue rose by 80% the second half of the year.
Bellamy’s plans to increase production this year because of shortages and high demand. In order to make this possible, they signed a newmanufacturing agreement in November 2015 with Fonterra Ord Unit.
This is good news for mothers in Australia who were struggling to grab a tin of Bellamy’s organic baby formula before it was out of stock. It will be interesting to see whether or not supermarkets revoke limits on how much formula a customer can buy now that Bellamy’s has more to go around.
There are many China business opportunities for foreign companies. Baby formula is just one example of a foreign-made good in high demand in China. Contact us for more information on which industries and markets are doing well in China.