The Bubs Australia Limited (ASX: BUB) share price is up 17% in early trade after the company announced a new partnership that will increase their reach in China.
About Bubs
Bubs was founded in 2006 by Kristy Carr and was listed on the ASX in January 2017. Its infant formula is based on goat milk and it also sells organic baby food. Bubs recently acquired NuLac Foods, Australia’s largest producer of goat milk products. It also guarantees exclusive supply of local goat milk from Australia’s largest herd of milking goats.
New Partnership
Bubs announced a new strategic channel partnership with Kidswant, the market leader in infant and child retail with the largest share market in China. Kidswant has 275 large-scale physical stores that service approximately 60% of Chinese cities with a population of more than 500,000.
With this new partnership, Bubs Organic food products are now ranged in all 275 Kidswant stores across 123 cities. Bubs estimates that the annual retail sales performance of Bubs products through Kidswant will reach RMD 30 million by FY20, or approximately A$6.24 million at today’s exchange rate.
Bubs CEO Kristy Carr said, “We are delighted to establish this strategic partnership with Kidswant, the No. 1 baby store chain in China. Kidswant’s store footprint and full-service integrated membership model provides us with immediate access to our core potential customers in a trusted ecosystem.”
What This Means For Bubs
This is an important step forward for Bubs in the race to gain market share in China. Bubs, Bellamy’s Australia Ltd (ASX: BAL) and The a2 Milk Company Ltd (ASX: A2M) shares have all taken a beating lately following increasing tensions in the US-China trade war, so it’s good to see some positive news emerge.
I recently wrote about why I would invest in a2 Milk over Bellamy’s or Bubs, but if Bubs can establish a few more partnerships like this one I may be proven very wrong.
For more growth share ideas, check out the companies in the free report below.
[ls_content_block id=”18457″ para=”paragraphs”]
Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.