Sydney based Bubs Australia, producer of Australian made organic baby food and infant milk formula products, has further expanded its distribution capacity into China with the signing of a direct international Supply Agreement with Netease Kaola.com. Under the supply agreement Kaola will purchase Bubs products in bulk and sell directly to Chinese consumers via their e-commerce platform, which has the highest market share among China’s cross-border retail import e-commerce businesses.
In addition, both companies have been working together to develop a long-term integrated strategy to promote Bubs brand to Kaola’s consumers and forecasted sales scheduled around key marketing activities and events.
Commenting on the formation of the new partnership NetEase Kaola CEO, Ms Zhang Lei, said, “Bubs is a very good global partner of NetEase Kaola.com. Their goat milk infant formula and organic baby food will be in great demand in the high-end oriented and diversified Chinese market. Kaola is looking forward to the deeper collaboration with Bubs Australia and sincerely hopes we can work together to offer Bubs high quality Australian made products to our Chinese customers.”
Maternal and baby products make up Kaola’s second largest product category, falling just behind beauty and cosmetics, with 42% of their 15 million loyal customers having purchased baby related products. Kaola’s consumers are predominantly female, aged 18-35 and from large cities. They are highly educated with above average household incomes, and willing to pay a premium for high quality international products. On average, Kaola’s customers spend twice as much as the cross-border e-commerce industry average per transaction, making them a prime lucrative target for Bubs Australia.
Bubs Australia Chief Executive, Nicholas Simms, added, “We consider this strategic partnership with NetEase Kaola to be an important development in progressing our cross-border e-commerce strategy. By establishing long-term trading agreements directly with leading platforms, we can reinforce and leverage Bubs premium positioning and Australian provenance in a controlled environment, whilst remaining highly scalable and appropriately manage our inventory.”
Following a signing ceremony held yesterday in Sydney, Ms Zhang Lei participated in a livestream event with Bubs Founder, Kristy Carr, showcasing Bubs infant formula and organic baby food products, which was viewed by more than 680,000 of Kaola’s consumers and generated a high level of engagement throughout the event.
Kaola is owned by NetEase (Nasdaq: NTES), a leading internet technology company with 800 million loyal users, providing online services focused on content, social networking, communication, gaming and commerce.
Bubs Australia recently listed on the ASX (ASX: BUB) and following today’s announcement is trading up +6%, to AUD$15.5c per share.