Infant Formula in China: Why It is Being Shipped and Sold High


formula black market

Getting products into China is relatively easy for companies who decide to start working with Alibaba or one of the other e-commerce giants on the market. However, for many companies, they are getting their products in China through the black market. The black market is full of products that are being sent from other locations around the world, often depleting the supply of this product in its home country. This is the case with infant formula in Australia.

The amount of infant formula that was shipped to China has increased since 2008. This is due to the issues that surrounded contaminated baby formula. This led to six babies dying and countless babies falling ill from drinking the formula that was contaminated with melamine.

Since then, Chinese consumers have been searching for infant formula that comes from reputable companies that are often overseas. Though the black market is often used for counterfeit goods and goods that are not legally being brought into the country, the method for getting Australian baby formula to China is interesting, to say the least.

According to many stores throughout Australia, Chinese tourists are coming into these stores and buying the daily limits. This process is repeated for several days. Australia drug stores and grocery chains have had to put a daily limit on how much formula a person can purchase in order to meet the demands of consumers. These Chinese consumers then send the formula back to China to be re-sold in many cases.

There are other methods for getting the formula into China according to those who are in Australia. There are many packing and shipping outfits who are taking orders via social media sites such as WeChat, posing as though they are a souvenir store. In reality, the “souvenir store” is nothing more than a front for getting formula to China. Many would think that this would be highly illegal, but that is not the case. The Customs Act and Customs and Border Protection cannot dictate formula being brought into the country or exiting a country.

Needless to say residents in Australia are highly upset that they cannot purchase the formula they need for this being sent overseas and purchased by Chinese consumers. However, companies that are producing this formula and selling this through legal channels in China are finding huge support and profits with this move. Chinese consumers love formula that they can trust for their babies, as would any parent out there. This move into the Chinese market for many formula producers is one that is going to pay off in the end, as Chinese consumers are willing to pay astronomical prices for real formula that is not produced in China.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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