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Bubs Australia doubles revenue forecast in $17m deal

bubsBubs Australia Limited (ASX: BUB) today announced the Company has entered a Supply Agreement with New Times Asia with a total sales commitment for purchase orders valued at $17M in FY19, and increasing to $24M in FY20, and $37M in FY21.

“The agreement with New Times Asia is a major step forward in our China expansion strategy, and shows the investment we have been making and
continue to make in building our China presence is bearing fruit,” said Kristy Carr, founder managing director of Bubs Australia.

“Based on our annualised run rate of Bubs and CapriLac combined trading, the committed FY19 offtake by New Times Asia will be at least double our total company net sales revenue. We will now be well positioned to reach and suitably manage many new e-commerce channels in China.”

New Times Asia specialises in e-commerce sales and fulfilment in China, servicing all major and second tier e-commerce platforms, and represents global brands, including imported infant formula and milk powder.

“We are very pleased to partner with Bubs Australia. Bubs and CapriLac are very strong and trusted Australian brands. We are confident we can quickly build brand awareness and consumer demand for Bubs in China given the trend for premiumisation as reflected in the rapid growth of specialised formula, goat milk and organics,” said Michael Deng, founder and CEO of New Times Asia.

Bubs said the company will provide services including sales, account management, operations, fulfilment, logistics, payment, cash flow management, customer service, digital content production, promotional and marketing activities, such as Key Opinion Leader and product review campaigns.

Both Bubs and CapriLac entire product portfolios will be supplied to New Times Asia via the cross-border channel and sold on up to 20 e-commerce platforms, including major platforms already partnered with Bubs Australia; JD.com, Kaola.com VIP.com, and RED, as well as new vertical platforms, such as Suning (Red Baby), Jumei, Mia, BeiBei, Baby Tree (Meitun) and MamaGo.

Carr added that under the agreement, while New Times Asia has committed to purchasing minimum volumes of Bubs and CapriLac products, Bubs Australia maintains flexibility should New Times Asia not meet agreed performance measures.

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