Wednesday, 11 November 2015

Milk powder shortage the tip of the iceberg

News that a specific brand of infant formula was being snapped up off supermarket shelves by enterprising Chinese residents and shipped back home to China caught a lot of people by surprise. But the demand for high quality and reliable Australian produce is only starting and is going to get more intense. We saw that Swisse Vitamins was recently purchased by a Hong Kong company. Other Chinese companies are buying heavily into Australia's farming properties in an effort to supply what is mooted to be booming demand for quality produce in future.

Australian companies are not doing what they can to deal with this demand. I wrote about this issue several years ago in an effort to spark debate around the matter of food, which even then it was obvious the Chinese were very interested in.

The thing is that Australian companies are largely insular and risk averse. The enterprising Chinese businessperson will go to lengths we find hard to understand to satisfy what they see are big areas of demand in the Chinese market. In order to get in on the act our businesses have to be linked to the sources of information, which are largely in Chinese language. We need people working in our businesses who know where to go for information, and who know how to interpret what they read there.

The baby formula boom was just for us the first inkling of a huge demand there is hiding latent in China, and businesses who can effectively tap into that demand will do well in future by anticipating such buying cycles.

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