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Singles Day blamed for shortages

News, 13 November 2015

SYDNEY/BEIJING: Global brands are capitalising on Alibaba's Singles Day, with 13 nations operating "country pavilions" on the Chinese Tmall platform, but for some Australian brands the surge in offshore sales has come at a cost in domestic markets.

Australian mothers are reported to be angry following a shortage of baby formula in the country, believed to be spurred by Singles Day shoppers and Chinese bulk buyers shipping Australian products to China at inflated prices.

In the past few weeks, Australian parents have discovered supermarkets to be totally sold out of baby formula brands, such as Bellamy's and A2 Platinum.

According to the Sydney Morning Herald, organic infant formula brands have been struggling to keep up with Chinese demand for months, which has hit local consumers.

For brands, Chinese demand for products can be too big an opportunity to pass up, but local retailers are also said to be frustrated by the shortages.

However, recent Nielsen research has indicated that Chinese consumers place particular importance on the source location of particular goods.

"The Chinese have a very positive brand perception for products that are sold in Australia, and they like brands that are both premium-priced and premium in quality," said Peter Nathan, chief executive of the A2 Milk Company, in comments to the Guardian.

"Our research clearly demonstrates that many Chinese prefer to buy a product retailed in Australia from a friend or relative that they trust, and our brand awareness is growing in China which is also driving growth."

The online country pavilions are a lucrative opportunity for international brands to connect with consumers in regional China, where they may have less market infrastructure.

By participating, foreign brands helped to make the 2015 Singles Day promotion the highest-grossing shopping day of all time.

Previous records were smashed as this year's event clocked up more than $14bn in sales, up 60% on last year's total of $9.3bn.

Data sourced from Sydney Morning Herald, The Australian, Guardian, BBC; additional content by Warc staff