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Baby food maker Bubs inks deal with Chinese giant

Baby food manufacturer Bubs Australia will soon see its products in up to 80,000 outlets across China, under an agreement with the country’s largest distributor of infant nutrition products.

Bubs announced to the ASX today that it had signed a distribution deal with QianJiaWanPu Co, to supply up to 80,000 Mother & Baby stores in China with organic baby food pouches, cereals and snacks.

The company said an initial order to the value of $1.1 million would be supplied between June and December.

QianJiaWanPu founder Zhou Dongming said the addition of Bubs products was an important extension to its international product portfolio.

“In time, we look forward to deepening our association with Bubs once its goat milk infant formula products are approved for import,” Mr Zhou said.

“Premium organic baby food and goat milk based formulas are two segments of the category experiencing rapid growth in China, and I’m confident my retail customers and Chinese mothers will find Bubs’ Australian brand story and premium quality attributes a winning combination.

“No other infant formula brand in the world uses Australian goat milk, so this point of differentiation will be highly sought-after.”

Bubs Australia managing director Kristy Carr said the deal was an important step in the execution of the company’s China strategy.

“The importance of the partnership cannot be underestimated, given that Mother & Baby stores account for over half of all infant formula products sold in China, and is the prime source for new parents and parents-to-be seeking advice about babies’ development and infant nutrition products,” Mrs Carr said.

“This is why physical representation in the sector is critical to our long-term success in the market, notwithstanding the importance of cross-border e-commerce and daigou shoppers as our existing primary routes to market.”

Bubs’ stock gained 1.5 cents on the ASX following the announcement, to close trade at 81 cents.

The deal is the latest in a series of recent tie-ups between Australian infant formula manufacturers and Chinese groups in 2018.

Earlier in April Wattle Health Australia inked a deal with China’s International Supplies and Distribution Company, to distribute its products across more than 2,000 retail stores.

That was followed up by Golden Koala milk, infant formula and milk powders being approved to be sold on JD.com’s JD.hk cross-border platform.