Vitamin-Maker Blackmores' China Fortunes Could Be Turning

Blackmores natural remedy products.

Photographer: Dan Peled/EPA

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Australia’s Blackmores Ltd., which has relied on the Chinese personal shoppers known as daigou for access to consumers in Asia’s largest economy, is breaking free.

The vitamin maker said this week it’s now getting half of its mainland revenue from selling straight to consumers there, helped by a China export unit started just over a year ago.

The Sydney-based company’s shares have lost about half their value since early 2016 as China moved to tighten scrutiny of the imported food supplement, disrupting the daigou grey-market business model. Blackmores’ fortunes could be turning, with the stock rising 19 percent since its results were released pre-market Tuesday.

It’s “all about the Asian growth story,” says Chris Kallos, an analyst in Sydney at Morningstar Australasia Pty.

Don’t expect the daigou to disappear though. New Zealand’s a2 Milk Co. says they remain a “key focus” even as it sells more of its infant formula to Chinese consumers online.

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