Its results were largely driven by a 43.5 per cent growth in China label sales. However,the overall Chinese market shrank by 12.5 per cent during the half,due to declining birth rates in the country.
A2’s shareholders weren’t impressed sending the company’s share price down 8.6 per cent to $6.49 at the close of Monday’s session.
David Bortolussi,the chief executive of the infant formula maker,said while a range of marketing and distribution efforts had driven greater brand recognition of A2’s brand within China and lifted sales,the daigou (reseller) channel of its English-label business suffered 39.5 per cent because of China’s zero-COVID lockdowns.
“No doubt[the lockdowns] had a significant impact,” Bortolussi told this masthead.
He also signalled a reassessment of the role played by the daigou channel – a network of shopping agents who buy things for residents on mainland China – in driving A2’s future growth.
The daigou channel was crippled at the onset of the pandemic,which cut off international travel and stopped resellers from bringing infant formula product in and out of the country. In August 2022,thedairy giant had signalled a renewed focus on building the channel back to its heyday,but the recent lockdowns have forced yet another rethink.