Geo-Poland: switching focus from Hong Kong to mainland China 01-28-2016

On 6 January, Geo-Poland announced that it will launch a range of 5 high quality Hosland milk formulas in March.

 

On 6 January, the Polish exporter Geo-Poland operating locally as Hosland China used a Shanghai meeting to announce its plan to launch 5 premium powdered milk formulas onto the mainland China market. From March, it will introduce the products as follows:

  • For babies and young children: designed to mimic breast milk as far as possible, including OPO (a structured lipid synthesized from palm oil) and lactoferrin (LF)
  • For children: focusing on DHA, ARA and Ca to promote the full cognitive development in children of school age
  • For adults: concentrating on formulations with low-fat and bone strengthening capabilities, targeted at middle-aged and seniors


Currently the product range in Hosland's flagship store on Tmall.com is fairly simple: only one golden infant formula is produced in the Netherlands, and infant formulas are Stage 2 for babies at 6-12 months and Stage 3 for young children at 1-3 years old, all priced at USD50.4/900g (RMB328).


To date Hosland is selling in 2,000+ supermarkets and stores in Hong Kong and Macao, its products imported from Australia and the Netherlands in their original packing. The company claims a JV plant in Australia and a fully-owned farm covering 2,667 ha (40,000 mu) in the Netherlands the latter is presumably a reference to the products' manufacture by Ausnutria's Lypack facility.

 

 

Shrinking infant formula market in Hong Kong makes mainland China key

 

Hosland was established jointly with several Hong Kong enterprises including SITC International Holdings Co., Ltd. (transportation services) and Honbridge Group (Investment fund). It is also a strategic partner to China Resources (Holding) Co., Ltd.

 

Its GM, Xie Guansheng, notes that selling in Hong Kong and Macao is not enough for the company: “Purchases of infant formula in Hong Kong are strictly controlled – each buyer can only purchase 2 cans of infant formula, which limits our development. Moreover Hong Kong’s market capacity in terms of neonates is very small. So we decided to enter the Chinese mainland market directly”.

 

Since 2013, Hong Kong's restrictions on purchases powdered milk formula have led members of its Legislative Council to advise the government to revoke the restrictions so as to attract more mainland tourists. However, Hong Kong’s Food and Health Bureau has resisted such suggestions, its priority being to satisfy demand from local residents.

 

“We need to proactively change our approach”, said Xie Guansheng. At present in China the price competition amongst different brands is very fierce, and cross-border e-commerce businesses are intensifying the level of competition still further. “It is not easy to open the Chinese market”, said Xie: “But brand marketing and OEM relationships aren't enough to achieve our goal. The most important factors are capital resources and supply chain. We are very confident about gaining recognition from consumers, as our products are mainly sourced from foreign quality milk production bases”. In addition, however, Hosland plans to acquire plants in China during 2017-2018 to localise the manufacture of some products.

 

Hosland infant formula (Stage 2) imported in original packing

Source: Baidu.com

 

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Tag: Geo-Poland, milk formulas

 

 

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