A2 Milk’s revenue and net profit fell by 30 per cent and 79 per cent respectively over the 2021 financial year and was forced to downgrade its profit forecasts four times in as many months.
However,Mr Hearn said the 21-year-old company would remain committed to theChinese market by adjusting its strategy,including reducing reliance on daigous (professional shoppers that resell luxury goods to Chinese buyers).
“Daigou is not going to disappear,but it’s never going to be quite the channel it once was and other channels are clearly replacing those,” Mr Hearn said,after the company’s annual general meeting on Wednesday.
He added the daigou market,severely hamstrung during the pandemic by the travel ban that stemmed the flow of international travellers and students,was already showing signs of recovery. “But we’re not relying on a huge daigou bounceback.”
Mr Hearn said striking the right balance between supply and demand was both the company’s primary focus and its greatest risk,and that it was watching market prices “like a hawk every day”.
A2 Milk chief executive David Bortolussi said the business would “of course love to have greater diversification” but that the “reality” of the opportunity in China was “substantially greater” than other markets.