The announcement came as half year sales revenue dropped 5% to $303m. Net profit after tax was also down 47% to $18m.
Asia as a whole saw revenue climbed 29%, with Indonesia and Malaysia delivering strong growth as revenue shot up by 45% and 9% respectively.
Continuing the trend from previous quarters, China remains a pain point for the company as revenue dropped 6%. The ongoing covid-19 outbreak has also exacerbated the situation by disrupting supply chain.
Even so, the company announced in its growth strategy yesterday that “China will become the lead market for global design and product development” and identified the “young and modern career women” as the key consumer group.
It will even invest in a China Innovation Centre, signalling its shift away from the previous “Australia leads, Asia follows” approach.
The centre will focus on China local product and package innovation, as well as delivering consumer insights.
Career women are targeted as they represented high buying power and influence over family purchase.
The company added that it would work on product premiumisation, expanding product range and sales channels to win over this group of consumers.
Previously, the Blackmores Institute and Tsinghua University also conducted the study “Mental Wellbeing of Chinese Career Women”, which the company said would form the basis of future innovation.
According to the study, over 80% of the Chinese career women reported anxiety or depression in the past year, with those born after the 1990s reporting the highest rates.
“We confirm that the Blackmores Group sales performance in the first-half has been broadly in-line with expectations and our brand health metrics are very strong.
“With our renewed strategy, we are making clearer choices that set the business on a stronger footing for the long-term that will free the Group to focus on what matters – delighting consumers, improving natural health literacy, and prioritising growth,” said CEO Alastair Symington.
Plans for south
Elsewhere down South in Indonesia, the company said its JV with Kalbe Farma was performing “well ahead of expectations”, delivering very strong yoy revenue growth.
According to data from Watson, Blackmores is also the top brand in Indonesia’s modern trade as of November last year. On the other hand, the Vitamins and Dietary Supplements (VDS) market in Indonesia is expected to grow at a CAGR of 9.6%, according to Euromonitor International data from last year.
The company said it would focus on maintaining its premium positioning with new products and work with Kalbe to open up new channels in Indonesia.
About three months ago, the company also expressed their interest in the Indian market. Fast forward to today, it is now confirmed that it will commence market test drive in India from FY2021.
“We will leverage our unique manufacturing and partnership capabilities to drive new growth in Indonesia and India and key to this will be to build a world-class global organisation,” said Symington.
Rejuvenating domestic market
Back home, the company is planning for a rejuvenation as domestic sales have been flat for the past four years.
This time round, revenue in Australia and New Zealand was 20% lower at $115m, while Earnings Before Interest and Tax (EBIT) nosedived by 55% to $15m.
Some contributing factors include additional material and packaging costs.
However, the brand retains the number one VDS position in Australia and the Blackmores brand share stands at 14.8%.
To rejuvenate the home market, it said it would create targeted channel strategies in under-penetrated channels and ensure that the products come in the right pack, the right channel, and the right price.
It also plans to deliver superior consumer experience at all touch points with natural health education.