The China health foods giant announced its half year results for FY2021 on August 6, where revenue has been on an upward trajectory.
Operating revenue was up 34.32 per cent to RMB4.19bn (US$647m), while net profit attributable to shareholders was up 42.55 per cent to RMB1.37bn (US$211m).
Its protein powder, sold under the same brand name BY-HEALTH, was one of the bestsellers, with revenue up 40.69 per cent to RMB2.56bn (US$395m).
Joint health product Keylid also saw revenue increase by 29.25 per cent to RMB850m (US$131m), while Life-Space grew by 34.53 per cent to RMB118m (US$18.2m).
One of the most striking points was the firm’s sales performance on its online direct sales stores. A brand’s flagship store on Tmall is an example of online direct sales stores.
BY-HEALTH uses both direct sales stores and distributor model for its e-commerce operations, with its subsidiary firms I-MyBest Network Technology (广州麦优) in charge of direct sales or distributor sales on 30 channels such as Tmall, Taobao, JD.com, WeChat, Vip.com. Amazon China, Kaola, and ByteDance.
Products sold include protein powder for improving immune system, collagen for women’s health, glucosamine chondroitin calcium tablets for bone and joint health, and multivitamins.
In the first half of this year, the revenue from online direct sales stores hit RMB516.4m (US$79.6m), which was over six times higher than that of the same period last year and higher than the total achieved in FY2020. Gross margin from online direct sales stores was 71.53 per cent.
BY-HEALTH has been topping the sales charts for various e-commerce shopping events. During Double 11 last year, it was the leading brand on both Tmall and JD.com. It was also the second-bestselling brand on Tmall and Taobao during 2018’s Double 11.
Overall, offline sales remained the key revenue contributor in the first half of this year, bringing in 71.71 per cent of the total revenue.
Revenue from the offline channels also grew 24.18 per cent to RMB$2.7bn (US$422m).
In Australia, BY-HEALTH’s subsidiary Life-Space Group suffered as international travel came to a halt and led to a drop in tourist and daigou sales.
However, sales from cross-border e-commerce from Australia to China saw growth, leading to a 0.21 per cent rise in revenues to RMB$304m (US$46.9m).
Some of the most prominent new launches in the first half of this year included a plant-based health food which claims to support the reduction of blood lipids and a GABA collagen peptide drink.
The plant-based health food contains natto and red yeast rice and is sold under the brand name Shu Bai Ning (舒百宁) and is meant for individuals with a higher blood lipid level.
The blue-hat certified product is, however, not suitable for use in adolescents, children, pregnant and breastfeeding women.
“Based on nutrition research using big data, we launched a new generation plant-based product ‘Shu Bai Ning’ for reducing blood lipid,” the company said in the report.
The GABA collagen peptide drink, on the other hand, was launched under the brand Gymslim (每日每加) and is marketed as a FMCG product.
Dosage format wise, revenue from tablet products was up 4.38 per cent, down 2.12 per cent for powder, up 24.16 per cent for capsules, and up 75.78 per cent for others.
Filing and registration
The company had 14 health foods approved via the ‘blue-hat’ registration track and eight products approved via the filing track in the first half of this year.
Another seven products’ ‘blue-hat’ registration certificate was void.
‘Blue hat’ registration allows health foods to be sold offline in China, but it is a more time consuming and more expensive procedure than the filing approval process.
Examples of newly-approved blue-hat products were grape seed extract soft gel capsule, fish collagen soybean peptide hyaluronic acid powder (orange-flavoured) – both under the brand Gymslim (每日每加) and conjugated linoleic acid soft gel capsule under the brand BY-HEALTH.
In the same period last year, 20 products received the ‘blue-hat’ certificate and five were registered via the filing track.
In total, the company has 149 ‘blue-hat’ products and 120 products approved via the filing track.
SEA in focus
The company has obtained 74 new trademark registrations in the past six months, of which, a number of key registrations were conducted in South East Asian countries, which was not seen in the past one to two years.
Examples include Pentavite in Indonesia and Philippines, received on March 13 and March 26 respectively and are valid until Feb 26, 2030.
Keylid was also registered in Vietnam and is valid until April 2, 2030.
“The company has planned for the sales of Life-Space, Pentative, and BY-HEALTH in the South East Asia, America, and other overseas markets. The main models used would be direct sales and distributor sales both online and offline. Currently, the volume is relatively small,” BY-HEALTH said in the report.