Blackmores was one of several Australian firms to benefit from soaring China sales, both via e-commerce and daigou trade, between 2014-2017, but has struggled to maintain momentum in recent years.
In the firm’s annual report, published on Thursday, it was revealed that revenue in the China segment (key export accounts and in -country revenue) stood at $122m, down 15% on the prior year.
This downturn was largely attributed to changes in e-commerce laws, which came into force in January.
However, the in-country business continues to grow strongly with revenue up 22%.
Symington told us the company was now preparing to launch a new, multi-channel strategy for China, including improved access to domestic in-market trade.
“I today announced that Kitty Liu will join us on December 1 as Managing Director for China. She has a wealth of experience at companies such as General Mills, Reckitt Benckiser, Yum! and Unilever across diverse markets like China and Japan.
“With our combined experience I think we will have a good understanding of what it takes to sell in the China market and we will be announcing the key strategies soon,” he said.
While sales in China have dipped, Blackmores has seen strong growth in its ‘Rest of Asia’ category, with Symington adding that its expansion plans across the region were far from complete.
At the top of his list for exploration is India – a country that is currently receiving a lot of interest from international nutrition brands.
“India is a market we are looking at very closely and will undertake a thorough assessment. There is a lot of opportunity there, but it can be challenging. We need to make sure we do anything in a way that will have a long-term impact.”
The latest financials reported that the ‘Rest of Asia’ business revenue hit $107m, up 30%.
Vietnam revenue grew by 157%, Korea by 28%, and Indonesia by 90%.
“We are now the number one infant formula brand in Vietnam, while in Indonesia we have a very strong local partner with PT Kalbe Farma,” added Symington.
The new CEO, who previously held roles with Coty, Proctor and Gamble and Nestle, said the company was facing a period of unprecedented competition and retailer demands.
He told us this meant there would be a renewed focus on cost management, operational efficiency and innovation
Indeed, the annual report reveals that the firm’s revenues actually increased by 1% year-on-year to $610m, but full-year profits after tax slumped 24% to $53m.
“We have a big opportunity to improve,” he said, adding that the industry as a whole was been affected by rising raw material costs.
“We have to think about things such as promotional and trade spending to improve gross margin.”
When asked if this could have an impact of staffing, he added the firm said he would assess how best to re-focus and “reallocate all resources” as part of its transformation plans.
He added that also applied at a category level, and indicated that the company’s pet nutrition range, Paw, was ripe for further growth.
Symington also backed-up previous comments from outgoing interim CEO and company director Marcus Blackmore, who said the firmneeded to re-focus on innovation and product development.
“We are not short of ideas at Blackmores,” he added, “but perhaps we have lost some confidence with high-impact innovation.
“Our category is all about education and information, but you can get caught short with the short lifecycle of some products, and that tends to lead to innovation falling flat.”