Swisse sales surged last year, while parent group records probiotics revenue boom

By Cheryl Tay contact

- Last updated on GMT

Swisse has been making headway with its presence in brick-and-mortar retail stores, including Watsons, Kidswant and Ole.
Swisse has been making headway with its presence in brick-and-mortar retail stores, including Watsons, Kidswant and Ole.
Swisse Wellness sales surged by 21.5% on a currency-adjusted basis to A$659.4m in 2017, thanks to clarity over cross-border e-commerce rules in China, rising demand and new product launches.

The figures were released by parent company Health & Happiness, which saw revenues rise 24.4% to RMB8,095m year-on-year, with the group's baby nutrition and care (BNC) and adult nutrition and care (ANC) segments contributing approximately 57.8% and 42.2% of total revenue respectively.

E-commerce was a main contributing factor in Swisse's revenue and profit growth, thanks to the vitamin firm's successful partnerships with major Chinese e-commerce platforms such as NetEase, Tmall.com, Kaola.com, VIP.com and JD.com.

However, Swisse has also been making headway with its presence in brick-and-mortar retail stores, including Watsons, Kidswant and Ole.

Swisse's 'normal trade' in China was launched last April, starting with products such as hair, skin and nails (HSN) and cranberry concentrate in liquid and effervescent forms.

At the same time, the company has partnered with the Scuderia Ferrari F1 team, and received celebrity endorsements in the form of brand ambassadors Nicole Kidman and Fan Bingbing.

Luo acknowledged that such endorsements have been driving strong sales in China, and helping to up Swisse's profile in new markets.

Shifting finances

This comes after Chinese authorities introduced clearer, stricter regulations for cross-border e-commerce at the beginning of the year.

Last February, Health & Happiness acquired the remaining 17% of Swisse it did not yet own for A$311m, completing a two-phase buyout that began in 2015.

Last November, it bought back Swisse's distribution rights​ from PGT Healthcare for A$131m, ensuring it would be able to benefit from China profits immediately.

In terms of Health & Happiness' broader portfolio, the infant formula market share of Biostime, the group's flagship BNC brand, increased slightly, while the Healthy Times organic series also started to contribute to overall market share.

However, the market share of the group's Adimil branded formula products weakened compared to the previous years.

"Consequently, the group's overall market share in China remained stable at 5.5% for the 12months ended December 31, 2017," ​added the firm.

The sales momentum of the group's probiotic products segment remained strong throughout 2017, with revenue reaching RMB781.7m, an increase of 54.7% compared to the previous year.

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