A2 Milk is confident it will meet all new Chinese cross-border e-commerce requirements affecting the sale of its Platinum infant formula in that country on or before March 31 next year.
China’s government has extended the grace period for foreign companies to meet these new requirements to that date from Jan. 1.
The new requirements include English label products that comply with country of origin regulations can continue to be sold in China through e-commerce channels if they provide the consumer access to an electronic Chinese translation of the packaging label as well as notification that the products comply with regulations in the country of origin but not necessarily with those of China.
Consumers will be required to electronically acknowledge their understanding of these notifications before placing an order.
Such products must have adequate traceability systems, return and exchange services, product recall systems, product quality and safety risk prevention and control mechanisms and consumer dispute handling processes.
They must have real-time reporting of transaction, payment and logistics information electronically to China Customs.
“The company welcomes this further guidance, which continues to demonstrate the Chinese government’s support of this channel with a strong focus on improving channel transparency and protecting the rights and safety of consumers,” A2 said in a statement.
“The detailed implementation policy guidelines issued on Nov. 30 are consistent with the A2 Milk Company’s market interpretations expressed in market announcements on Sept. 3 and Nov. 22,” it said.
In the year ended June, 25.3 percent, or $233.6 million, of A2 Milk’s total sales were directly into China and other Asian countries through bricks-and-mortar “mother and baby” stores as well as through e-commerce channels such as Alibaba’s Tmall.
However, a fair chunk – the exact numbers aren’t disclosed – of A2’s sales in Australia and New Zealand, which totalled $656.6 million in the year ended June, were destined for China through the Daigou or grey-market trade.
The majority of A2’s $724.2 million Platinum sales are ultimately in China.
The shares rose 3.9 percent to $10.75 in early trading today.