Lauren Sneyd, Library Assistant & Information Specialist, Bord Bia - The Irish Food Board
Bubs Australia is a company producing a range of Goat milk based infant formula founded by Krisitna Carr in 2006 who saw a gap in the market for such products. Initially the company sold in health stores and independent retailers but they then began to expand their distribution to chain retailers before entering the Chinese market after experiencing increased popularity and success in Australia.
Some of the health benefits of goats milk are the fact it is higher in protein and calcium in comparison to cow’s milk, easier to absorb as there is less lactose, higher in prebiotic carbohydrates supporting the digestive system, and can enhance the body’s ability to absorb nutrients from other foods (Globaldata, 2019).
The company entered the Chinese market in 2018 after their acquisition of Nuhac foods in 2017 and their international supply chain agreement with JD.com one of China’s largest online retailers. From here the brand continued to develop and grow with Alibaba another huge online retailer, cementing their increased presence in China with their aggressive and timely initiatives proving successful.
Why have they been so successful in China?
China doesn’t have a positive track record in regards to food safety. The 2008 milk scandal that has severely damaged the reputation of China’s produce resulted in increased demand for foreign products. According to Globaldata “China is the least likely country to be associated with “high quality” products that are locally sourced when considering infants” (Globaldata, 2019). This insight highlights an opportunity for Irish and other foreign suppliers, as “foreign businesses still have the advantage in safety and consumer trust; and perceptions of premium
Securing consumer trust helps determine success:
Bubs has recruited social media influencers to help establish a positive image of the brand and ensure its success with consumers. Zhang Zetian, a popular social media influencer from China, was enlisted to help promote the brand and project an image that would appeal to consumers. Bubs have continued to recruit influencers and even fly them to the goat farms in Australia to verify the products authenticity and post the experience on different social media platforms acting as a means of traceability.
“All the social noise happens through influencers, and a lot of that is done through live streaming – ‘This is where Bubs infant formula comes from’ – and it goes a long way for transparency” Kristy Carr (New York Times, 2018).
What can Irish suppliers learn from Bubs success?
- Highlight provenance when targeting Chinese consumers who have greater confidence in foreign produce. The current tensions between China and the US could present opportunities for other foreign markets to solidify relations with China.
- Explore the online channel as a viable profitable distribution route to market as “Online is a hugely important retail channel for infant milk formula with consumers visiting Taobao or mother and baby store websites being a go to must for most mums” (Bord Bia, 2015)
- Capitalise on digital technology that will facilitate traceability. The reach of influencers and social media is huge and could be a potential asset in building trust with consumers.
- The importance of quality and safety cannot be understated as traceability and consistency is key long term, will enable brands to navigate the market uncertainties.
If you would like to read more on this topic check out:
'Market trends for Infant nutrition and supplemental products in China' by Suki Wu here.
For more information contact the Bord Bia Library team through thethinkinghouse@bordbia.ie
Sources:
Globaldata. (2019). Success Case Study: Bubs Australia – a Determined Cross-Border Strategy to Capitalize on Appeal in China (2019). Retrieved 18 September 2019, from https://consumer.globaldata.com
Bord Bia. (2019). Infant Formula In China: The Opportunity For Ireland - 2015. Bord Bia.
Bord Bia. (2017). The Future Of Dairy In China. Bord Bia.
Bord Bia, (2019). Culture & Context & “Pathways” from food brand Ireland – 2017. Bord Bia
Tarabay, J. (2019). As U.S.-China Trade War Rages, Some Australian Farmers See an Opportunity. Retrieved 19 September 2019, from https://www.nytimes.com/2018/11/29/world/australia/australia-china-us-trade-war.html