The financial performance of these major players had been better than the forecasted numbers earlier this year, said Zhang Zhong Peng, director at China Chamber of Commerce for Import and Export of Medicines and Health Products (CCCMPHIE).
Keeping the pandemic under control, a functioning manufacturing and supply chain, resumption of foot traffic, and continuously growing e-commerce market are the reasons that Zhang believes have led to the recovery.
“In Q1, we had the Chinese New Year and COVID-19 had begun to spread, so the businesses were more affected. In Q2, we entered the recovery phase and in Q3, the recovery has been better than expected,” said Zhang.
BY-HEALTH is one of the firms which has reported good recovery.
Its net revenue for Q3 was up 35.17% compared to the same period last year, reaching RMB$1.9bn (US$284m),while net profit shot up 55.82% to RMB$504.9m (US$75m).
There was also a 14.88% and 23.16% growth in revenue and net profit in the first nine months of this year as compared to last year.
This is a contrast to the firm’s performance in Q1, where revenue was down 4.84%, where a notable decline in revenue was seen across the flagship ‘BY-HEALTH’ brand, as well asbone health brane ‘Keylid’.
It said COVID-19 had impacted its manufacturing, marketing, and sales activities in Q1.
By Q2, the firm gradually resumed marketing activities for some brands, which saw a rebound in growth. Moving to Q3, “rapid growth” was seen in both revenue and sales.
On the performance in the domestic market, it said revenue from flagship brand ‘BY-HEALTH’ was 9.43% higher in Q1-Q3 this year than last year, achieving RMB$2.98bn (US$444m). ‘Keylid’ grew 12.21% to RMB$1.08bn (US$161m), while Life-Space brought in RMB$131m (US$19m).
Revenue from offline channels contributed to 77.09% of the entire revenue, a 5.32% growth from last year, while revenue from online channels went up by 49.72%.
Overseas, Life-Space brought in revenue of RMB$436m (US$64m), up 23.90%.
Contract manufacturer Sirio Pharma and brand/supplier Angel Yeast have also reported growth.
Revenue for Angel Yeast was up 15.58% from Q1 to Q3 to RMB$6.42bn (US$956m) compared to last year, and net profit increased by 52.12% to RMB$1.01bn (US$150m).
For Sirio Pharma, revenue in Q3 was up 40.58% to RMB$537m (US$80m) and that of Q1 to Q3 was RMB$1.4bn (US$216m), up 24.49% compared to the same period last year.
Another health foods giant, Xiamen Kingdomway, also forecasted that its profit in Q3 will jump by 54.68% to 121.48%, and profit for Q1 to Q3 to grow by 40% to 60 compared to last year.
“The financial performance from major enterprises should be alright, especially those which are listed on stock exchanges and have strong financial backing,” said Zhang, giving examples of BY-HEALTH, Swisse, aland, and Biohigh.
“The situation might not be the same for the smaller players and at this point, it is still difficult to gauge the overall performance of the entire health foods industry.”
Although the phase of frenzy purchase of health foods has subsided, he believes that the immune health category will still stay relevant.
“In the future, it is probably the big brands or unique brands with quality products that can stay ahead of the competition.”