The ASX-listed Australian company announced its financial results for the first half of FY2022 on February 23.
Gross revenue from the corporate daigou channel hit a record high, reporting a 276 per cent increase as compared to the prior corresponding period (pcp).
This follows the strong growth momentum seen in FY2022 Q2, where the company said that gross revenue from its corporate daigou channel was up 196 per cent, with demand for infant formulas exceeding pre-COVID-19 levels.
“Corporate daigou channels are digital marketing and consultancy companies that incorporate large numbers of retail daigou agents into their business operations through formal channels or platforms.
“Corporate daigou platforms help them manage the process of product procurement, delivery, and other logistics and administrative issues,” according to Haiqing Yu, associate professor at the School of Media and Communication, RMIT University.
Bubs is also pinning hopes on the return of China students, a major source of daigou agents, to Australia.
“We see potential upside in Australia’s borders reopening with the return of Chinese students, although continuing challenging market conditions are expected to remain for some time,” said Bubs founder and CEO Kristy Carr.
Australia fully reopened its borders to travellers vaccinated against COVID-19 on February 21.
Pre-COVID-19, there were 211,965 China students in the country between January and December in 2019, according to data from Australia’s Department of Education, Skills, and Employment.
Between January and September last year, there were 166,319 China students in Australia.
Bubs recorded a group gross revenue of AUD$38.5m (US$27.9m) – up73 per cent pcp, while its EBITDA profit was AUD$1.2m (US$870k).
Infant formula was its key sales driver, with sales doubling.
Gross margin of all its branded products also increased to 30 per cent, while that of its goat infant formula was up from 34 per cent to 38 per cent.
Strong growth was also seen from its CBEC channel, where gross revenue was up 53 per cent pcp.
Moving forward, the company is partnering AZ Global for its daigou activities. The intention is to better identify the target consumer groups and their product needs in real time.
The company launched 16 new products across three product categories in eight markets during the first half of FY22.
For instance, it introduced its Toddler Formula range in larger pack size and single serve sachet packs.
It also launched Family Nutrition milk powders in Singapore, China, Seychelles, and Pacific Islands in October last year.
An organic baby food range, sold under the name Plant Burst, was also sold in Australia’s Chemist Warehouse, Taiwan, Malaysia, Singapore, Middle East.