Daiguo sales go south for Swisse
Sales from daiguo – Chinese migrants, usually in Australia, who export products back to their homeland – have slumped in recent months in the wake of new tax and ecommerce rules.
And nowhere has this been among some of the supplement firms. Swisse Wellness was recently quoted in the Financial Times saying it had experienced a drop in such sales from 100,000 at its peak a year ago to around 20,000 today.
Six months ago the Chinese authorities imposed more stringent import tax rules on postal items and foreign ecommerce.
And with tougher laws on infant nutrition slowly being phased in, this other lucrative sector for daiguo is also slowing down.
For its part, Swisse is now seeking to go straight to the Chinese consumer after opeining a dedicated store on the ecommerce site Tmall. It also aims to launch physical stores over the next year.
Swisse was bought by Hong Kong-based Biostime for $1.67bn last year. Biostime, best known for its infant formula products, saw sales slide by 14% in the first half of 2016 to RMB1.46bn (US$220m), with the Biostime brand – which accounts for 86% of the company’s sales – down 5.4% and the value brand Adimil down 65.7%.
Blackmores targets Iran boost
Australia has been making a concerted effort to boost its business ties in Iran, and it appears Blackmores is one of the early beneficiaries.
On the back of a recent high-level trade delegation to Tehran, the firm sealed a deal with local outfit Tasnim Pharma, providing access to Iran’s market for vitamins and dietary supplements that is estimated to be worth at least $585 million a year.
It is believed the deal allows Tasnim Pharma to sell 10 Blackmores products over the coming year, then increasing to around 25. Tasnim will also establish a new division to manage the brand and distribution.
Blackmores managing director in Asia Peter Osborne said the company would bring the benefits of its research and education arm to Iran through the Blackmores Institute, which is aimed at improving the use of natural medicine.
Blackmores chief executive Christine Holgate said Iran was the “largest untapped market globally."
“Working with Austrade and having a strong local partner in Tasnim Pharma is a low-risk entry into a market considered very complex,” she said.
Blackmores has had a rocky ride on the markets since January, with shares down almost 50% on the back of concerns about business in China - meaning there will be close attentiion when the firm releases its Q1 results next week.
Chinese firm buys stake in Nutrition Care
Chinese company Ausnutria Dairy Corporation has purchased 75 per cent of Australian supplement manufacturer Nutrition Care Pharmaceuticals for $30m.
Nutrition Care will retain a 25 per cent stake in the business and will oversee the company's research and training operations globally. The cash injection will be used to ramp up its activities in China, especially through e-commerce channels.
Professor Ian Brighthope, founder and chairman of Nutrition Care, said, "[This] marks the beginning of an exciting new chapter for Nutrition Care, which we believe will deliver significant value to the company and public. We have a deep respect for Ausnutria, and it is clear that they share our commitment to address the significant unmet nutrition needs in the world.
"We are confident that Ausnutria will help accelerate Nutrition Care's important mission given the strength of its global platform and resources, so that we can take advantage of multiple growth opportunities."
Ausnutria, an infant formula manufacturer, said the deal marked its official entry into the booming international health care product market.
"Ausnutria has been committed to improving public nutrition and health standard by providing high quality dairy products and strong foundation. The Group has realised the business potential and importance of the nutrition products years before.
"Given the increasing health awareness globally and in particular [China] where the living standard has been improving, the nutrition products segment has a great potential of high future growth," it said in a statement to shareholders.