Bubs Australia and China's largest baby store chain, Kidswant, have announced a supply agreement (27 June). Bubs food products will now be available in 275 Kidswant stores in 123 cities throughout China.
It is the first project of the company’s joint venture with Shenzhen-listed dairy and infant nutrition company Beingmate, which was announced in March.
Bubs said the annual retail sales performance of Bubs products through Kidswant stores is now expected to reach RMB 30 million ($6.24m) within fiscal year 2020. Bubs shares jumped 31.7 per cent to $1.23 on Thursday.
It's been a torrid month for the infant formula company. On 3 June the Chinese Government announced a plan to increase domestic infant formula supply to more than 60 per cent of the market as well as tightened registration of overseas formula producers (Food & Drink Business, 05/06/19).
Stock prices tumbled for Australian producers, including Bubs, which saw its share price drop seven per cent on the day of the announcement and a further eight per cent on 4 June. This was despite Bubs CEO and founder Kristy Carr saying the announcement worked in the company's favour as its JV with Beingmate was the type of relationship Chinese authorities were encouraging.
