Tuesday, March 8, 2016

The white gold rush: Why Chinese shoppers are going all-out for foreign formula

I'm lucky enough to live in a neighborhood that is attractive and interesting enough for people to actually pay to come and visit it (i.e. Tourist Central). Japan has seen almost uninterrupted growth in its tourist trade in recent years, especially Chinese visitors. Chinese tourists tend to be quite serious shoppers and the tills are ringing from dawn till dusk in the massive Don Quixote (*1) store that was built here last year in anticipation of growing numbers of tourists. Don Quixote is a.... well, rather quixotic store selling consumer goods of all kind and designed to look like a kind of shopping jungle; very much a store that says Buy Buy Buy! Except, interestingly, in the case of baby goods: the shelves of nappies and formula have signs saying "One pack only per shopper," and the tins of formula now have little security beepers sealed in with tough plastic which the checkout assistant has to remove with a Stanley knife.

Middle-class Chinese families have been going out of their way to avoid Chinese-made formula ever since the melamine scandal of 2008, in which some babies were killed and many more hospitalized after a shady manufacturer decided to doctor its formula mix with melamine to disguise the low protein levels. The fact that Chinese tourists are eager to buy Japanese formula in spite of worries a few years back about radioactive contamination in the wake of the 3/11 earthquake tells you something about just how bad the reputation of Chinese formula is. Meanwhile, many middle-class women prefer not to breastfeed or find it difficult; they may want to get back to to work as soon as possible to fund their children's education, and there is a lack of provision for pumping in most Chinese workplaces. Hence the development of a sizable "grey market" in which Chinese students, tourists and ad hoc entrepreneurs sweep the shelves for formula in places like Hong Kong, Australia and Japan, and then sell the tins in China for several times the price originally paid for them; at the more informal level, many visiting Chinese like to pick up formula as a gift for friends who have babies.

The thing about China is that the sheer, steamroller-like volume of people we are talking about means that a shortage of pretty much anything in that country (whether it's brides or baby milk) is likely to have repercussions for the rest of the world, and parents in Australia, New Zealand and Europe have been taking to social media to vent about being confronted with empty formula shelves and Chinese shoppers toting baskets crammed with tins and tins to take back to China. Chinese parents' desperation to acquire any formula that isn't Chinese is understandable; so, however, is the frustration of parents in countries which have done a better job at ensuring food safety. Last year in Japan, a punch-up developed in an Akachan Hompo between two groups of Chinese tourists who were trying to buy up as many diapers as possible (*2), while other Japanese stores are now rationing formula/nappies and even interrogating foreign-looking women at the till ("What are you buying these diapers for?"). In Australia and Europe, women of East Asian background are increasingly reporting hostile reactions from shop assistants if they try to buy several tins of formula at a time. Tensions are running high.

My first thought upon hearing of this trade was "Why don't the manufacturers just export formula to China?" However, it appears that there is a distinct ranking in terms of formula desirability: formula purchased overseas is top, followed by imported foreign formula purchased at an import store in China, and then, finally, formula manufactured in China by a foreign-affiliated company. Given the extremely high prices that are being charged for foreign formula and China's perennial issues with fake stuff, I suspect there are concerns that someone somewhere may have just slapped a foreign label onto a can of Chinese formula, while China's very serious pollution problems make many Chinese feel that even formula manufactured within a foreign-owned factory located in China is risky. Plus, when it comes to gifts I suppose there is a special value in receiving something that you know someone has dragged through customs and carried back home in a suitcase on a bouncing bus: "This is special and limited in supply, and I made the effort just for you." In any case, I guess that Australian or Japanese formula manufacturers have to limit the amount they export if they do not want to face a social media backlash from parents frustrated at shortages in their local supermarkets.

"Well, why not just produce more formula?" is the obvious response to all this. Long-run, I think that is the plan, and dairy industries in Australia and other countries have been enthusiastically gearing themselves up for expansion over the next couple of decades to meet Chinese demand for high-end milk products.

In the short-run however, it's not quite as simple as that. Formula is not just plain old cow's milk and contains an ever-increasing number of complex ingredients, which must be sourced according to rigid and complicated guidelines. The rules governing infant formula production are (not surprisingly) very strict indeed, and a producer would have to be pretty daft to risk cutting corners; the lesson of China's infant formula debacle is that for formula manufacturers, if you slip up even once, you will probably never win parents' trust again. Finally, cow's milk-based formula production requires specialist equipment, such as spray dryers (to dry the milk into powder). Australia's stray dryers are working at maximum capacity and constructing new ones requires huge amounts of investment. Meanwhile, Japan's dairy industry is in no situation to increase output; we can't even guarantee domestic butter supplies. The crux of the problem lies in the extremely high standards that parents (understandably) have for the milk they feed to their babies; these standards lead Chinese parents to do whatever they can to avoid Chinese formula, but they also make it hard to greatly increase the formula supply in a hurry. This article here has more.

Ultimately, the answer is for China to clear up its pollution issues, lack of pumping rights in the workplace and food safety frameworks so that a) Chinese families are able to trust Chinese-made formula again, and b) more babies can be fed breastmilk for longer, which will help to take the edge off China's exploding demand for foreign-made formula. In the meantime, let's hope that the dairy industries of Australia, Japan and elsewhere succeed in ramping up supply so that parents in these countries do not face empty shelves when they go to the store for milk to feed to their babies.

(*1) Do try Don Quixote if you ever come to Japan--it's crazy, tremendously fun and the products and customer service are top-notch. And the signs are all hand-made. The shop is deliberately designed to display all sorts of things at random, kind of bursting out of every corner--novelty penknives next to cosplay costumes etcKitKats, that kind of thing.
. It is also a good place to pick up snacks with weird flavors, like green tea caramels and peach-flavored

(*2) As someone who has used Japanese nappies, I can confirm that they are very, very good indeed, especially Merries which are apparently the most sought-after brand among the Chinese. Chinese nappies are said to be pretty dire, and there are worries about dodgy chemicals reacting with the skin on babies' behinds (Alternatively, maybe the parents are sensitive to Sino-Japanese political tensions and are enjoying the idea of Japan getting crapped on... who knows?).


  1. Hello dear, are you enjoying with this humorous YouTube video? Hmmm, that’s good, I am also watching this YouTube joke video at the moment.
    Women fashion

  2. Nice meet admin,
    Here i have found your blog from the first page of Google and it's really
    to hear about your voice,
    By the away, here the Colourful Baby with some good stuff for the USA babies. And you
    can visit our officil website best baby walker for USA babies thanks

  3. eToro is the #1 forex broker for newbie and professional traders.

  4. very informative content. Keep Writing. Medela India

  5. Ich schätze Ihren Standpunkt, und es tut mir leid, dass Sie Ihre Stillzeit früher beenden mussten, als Sie geplant hatten! Es ist so schwer, loszulassen, ich habe es mit meinen Zwillingen gemacht und ich erinnere mich an das Gefühl! Aber Sie sind in keiner Weise ein Fehler! Es hört sich an, als ob du deine Babys sehr liebst!

    Ich finde es komisch, dass in diesem Land die "Bescheidenheit" nur dann aufgeworfen wird, wenn es um stillende Mütter geht. Ich habe noch nie solch konservative Liberale gesehen wie diejenigen, die sich über öffentliche Vorführungen von Säuglingsernährung lustig machen. Vielleicht lebe ich in einer Blase, aber jedes Mal, wenn ich je eine Mutter gesehen habe, die ihr Baby ohne Deckung stillt, ist sie sehr bescheiden und das ist das am wenigsten sexuelle Ding auf Erden. Aber vielleicht gibt es da draußen Frauen, die ihren ganzen Kopf abreißen und ein bisschen tanzen, bevor sie mit einem Futter beginnen ... ich weiß es nicht! ;)

  6. Ever wanted to get free YouTube Views?
    Did you know that you can get them AUTOMATICALLY & ABSOLUTELY FOR FREE by using Like 4 Like?

  7. If you need your ex-girlfriend or ex-boyfriend to come crawling back to you on their knees (no matter why you broke up) you need to watch this video
    right away...

    (VIDEO) Why your ex will NEVER come back...

  8. Register with EverydayFamily now and you will get stage based pregnancy and baby newsletters, promotions and weekly coupons as well as access to free baby samples, baby coupons, baby magazines & more.

    New Members are Entered to Win Free Diapers for a Year!

  9. Irrespective of receiving daily oral or future injectable depot therapies, these require health care visits for medication and monitoring of safety and response. If patients are treated early enough, before a lot of immune system damage has occurred, life expectancy is close to normal, as long as they remain on successful treatment. However, when patients stop therapy, virus rebounds to high levels in most patients, sometimes associated with severe illness because i have gone through this and even an increased risk of death. The aim of “cure”is ongoing but i still do believe my government made millions of ARV drugs instead of finding a cure. for ongoing therapy and monitoring. ARV alone cannot cure HIV as among the cells that are infected are very long-living CD4 memory cells and possibly other cells that act as long-term reservoirs. HIV can hide in these cells without being detected by the body’s immune system. Therefore even when ART completely blocks subsequent rounds of infection of cells, reservoirs that have been infected before therapy initiation persist and from these reservoirs HIV rebounds if therapy is stopped. “Cure” could either mean an eradication cure, which means to completely rid the body of reservoir virus or a functional HIV cure, where HIV may remain in reservoir cells but rebound to high levels is prevented after therapy interruption.Dr Itua Herbal Medicine makes me believes there is a hope for people suffering from,Cancer,Hiv_ Aids,Herpes,Copd,Diabetes,Hepatitis,I read about him online how he cure Tasha and Tara so i contacted him on drituaherbalcenter@gmail.com even talked on whatsapps +2348149277967 believe me it was easy i drank his herbal medicine for two weeks and i was cured just like that isn't Dr Itua a wonder man? Yes he is! I thank him so much so i will advise if you are suffering from one of those diseases Pls do contact him he's a nice man.

  10. But Dr. Itua, Traditional Herbal Practitioner in Africa, Have cured for HIV which is extracted from some rare herbals. It is highly potential to cure AIDS 100% without any residue. Dr Itua herbal medicine has already passed various blogs on how he use his powerful herbals to heal all kind of diseases such as. Herpes, HIV, Diabetes, Hepatitis, Epilepsy, also his herbal boost immune system as well. I'm telling this because he uses his herbal medicine to cure me from hepatitis B and HIV, which i have being living for 9 months now with no side effect. The Herbal Medicine is just as good when drinking it although i have to use rest room after drinking it which I do not really care about because i just want to get the virus out of my body, I will recommend Dr Itua to anyone sick out here to contact Dr Itua with this following information.
    Whatsapp Or Call...+2348149277967.
    He might be late to respond because he always busy with patent, but he will surely get back to you with positive response.

  11. Do you realize there's a 12 word phrase you can communicate to your partner... that will trigger intense feelings of love and instinctual appeal to you deep within his heart?

    Because hidden in these 12 words is a "secret signal" that triggers a man's instinct to love, cherish and care for you with all his heart...

    12 Words Will Trigger A Man's Desire Impulse

    This instinct is so built-in to a man's brain that it will make him work harder than before to make your relationship the best part of both of your lives.

    In fact, fueling this powerful instinct is absolutely essential to achieving the best ever relationship with your man that the moment you send your man one of these "Secret Signals"...

    ...You will instantly notice him expose his mind and soul for you in such a way he's never expressed before and he will distinguish you as the one and only woman in the universe who has ever truly interested him.

  12. I was diagnosed as HEPATITIS B carrier in 2013 with fibrosis of the
    liver already present. I started on antiviral medications which
    reduced the viral load initially. After a couple of years the virus
    became resistant. I started on HEPATITIS B Herbal treatment from
    ULTIMATE LIFE CLINIC (www.ultimatelifeclinic.com) in March, 2020. Their
    treatment totally reversed the virus. I did another blood test after
    the 6 months long treatment and tested negative to the virus. Amazing
    treatment! This treatment is a breakthrough for all HBV carriers.