Comvita says daigou honey trade, hurt by Covid-19, will rebound

Friday, 23 April 2021

Comvita’s business in China has picked up some of the sales normally served by daigou traders.

Border closures as a result of Covid-19 have hindered the popular daigou honey trade, where international tourists, students and other private traders ship honey to China, but mānuka honey company Comvita is confident the market will recover.

In February, the country’s largest producer and marketer of honey and bee-related products said its New Zealand and Australian sales fell 21 per cent to $18 million in the six months to the end of December 2020 as the Covid-19 pandemic shut international borders and disrupted shipping, pushing up freight costs.

“The main Asian health daigou channels have been impacted, in the first instance in Australia, and then subsequently in New Zealand, and that’s the impact that you are seeing in our numbers,” said Comvita chief executive David Banfield.

Daigou traders are an important sales channel, because they target different consumers than Comvita would otherwise reach, he said. Traders range from individuals who send a few products back to friends and family in China to companies who fulfil orders and have revenues ranging from tens of thousands of dollars to a couple of hundred million dollars.

Comvita chief executive David Banfield says the daigou honey trade in Australia and New Zealand has been hurt by Covid-19 but he’s confident the entrepreneurial businesses will recover.

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“At the most sophisticated end, you have got some very good operators who are providing a real scalable service, and at the ‘pick-pack-and-post’ end you’ve got students, tourists and others who send product back to their extended network,” Banfield said.

Freight disruptions caused by the pandemic had seen some daigou customers in China buy locally instead through Comvita’s online and store network in China, he said. That helped boost Comvita sales in mainland China by 20 per cent to $35m in the six months to the end of December.

China is the world’s largest honey market, valued at $1.8 billion, and Comvita wants to grow its own market share and the imported honey share of the total market.

Banfield expects the daigou trade to rebound.

“The daigou sector is very entrepreneurial in the way they approach things, they are innovative, so whilst they have had challenges over this period, they will find new ways for their business model to evolve so they can reach their user base in China.

“The Asian health daigou tourism markets will return, they are incredibly resilient.”

Banfield said the travel bubble between New Zealand and Australia was an important first step in getting back to some form of normality.

Shares in Comvita slipped 1.8 per cent to $3.27 in early afternoon trading on the NZX on Friday. The shares have gained 11 per cent over the past year.