Channel hopping: Taiwan’s GKB explores TV shopping, online and social commerce for health foods sale in China
The deal was struck with Beijing-based Global Home Shopping (GHS), which is responsible for selling the product on TV shopping and on its e-commerce site “Shark Shopping”.
Containing antrodia camphorate – a fungus species native to Taiwan, the supplement, trademarked as Antrodia King, claims to protect the liver, prevent and alleviate hangovers.
A six-month human clinical trial had conducted by the company showed that antrodia camphorate supplementation exhibited liver protective effect in individuals with non-alcoholic steatohepatitis (NASH).
The supplement in capsule form is sold in China at a set of four bottles for RMB$1299 (US$187). Containing 60 capsules, each bottle is designed for a month’s usage.
Back in Taiwan, the product ranked amongst the top five bestsellers and contributed to 9% of the company’s revenue last year.
Business in China contributed 10% to the company’s revenue last year and the bulk of the business was providing original equipment manufacturer (OEM) and original design manufacturer (ODM) services.
However, the company is also exploring the sale of in-house products via B2B cross-border e-commerce platforms, aside from TV shopping, Will Lee, corporate planning director at GKB Shanghai told NutraIngredients-Asia.
Aside from Antrodia King, the company also sells its branded product ‘Probiotic King’ via TV shopping channels in China.
Chinese TV shopping channels have been striving to increase their health foods product ranges in recent months, with Lee adding they had seen an uptick in partnership enquiries.
“While we are open to working with more TV shopping companies, we also need to be cautious in selecting the partners to work with. Afterall, we need to take responsibility in the way how our products are being marketed,” he said.
The onset of COVID-19 is also expected going to further accelerate both online, social commerce, and TV shopping, he said.
Social commerce partnership
Seizing the opportunities in the virtual space, the company has also entered into a partnership with leading social-selling Chinese company Tin’s Secret (TST) in March.
TST operates via a membership model on social commerce and currently has nearly nine million members.
The goal was to develop, manufacture new health foods based on GKB’s expertise for TST to distribute on social commerce channels.
Both parties will form a new company in Qingpu, Shanghai.
Lee also revealed that GKB was in talks with China’s research institutions for scientific partnerships.
ODM/OEM business
While there are new ventures, Lee emphasised that ODM/OEM businesses would remain the core for GKB’s operations in China.
The company’s most popular products for ODM and OEM include collagen drinks, probiotics, and enzymes-based health foods.
During the COVID-19 lockdown period, the sales coming from probiotics OEM/ODM had gone up by about 30% as compared to the same period last year.
Demand for collagen OEM/ODM services, on the other hand, had dropped. Sales from the category declined by about 25% to 30%, said Lee.
He believes that it could be because consumers are more willing to spend on immune health related probiotics amid the pandemic.
However, since there were lesser social gatherings, consumers were more wiling to tighten their purse strings when it came to beauty products.
