Forgoing key e-commerce platforms: How Singapore supplement start-up woos Chinese consumers
Known as Qing Yang Beauty in Wechat, the online shop is reaping growth slowly but steadily.
Selling at RMB$458 per box, daily sales of its flagship product “InnerPur Skinny 3X” – a weight management and anti-glycation dietary supplement - has grew from 100 sales to an average of 300 to 500 in the past one month, Rebecca Wang, CEO of Innoso told NutraIngredients-Asia.
Made in Japan, the supplement made of food grade ingredients claims to block body absorption of sugar and fat by 75% to 80%.
The ingredients are all plant extracts, including premium brown seaweed extract Ascophyllumnodusum, fibresol-2, black ginger and water-shield.
In this case, Ascophyllumnodusum reduces carbohydrate and fats absorption by inhibiting the activities of lipase and amylase enzymes, hence cutting down the body’s calorie intake.
According to Innoso’s clinical trials done on 30 individuals, the average time needed to shed away 5kg is 18 to 20 days. The most effective result is shedding 5kg in a week.
However, unlike many supplement firms, Wang chose to operate independently of key e-commerce platforms such as JD or Taobao, preferring to sell via the firm’s online shop in Wechat.
“There are already many well-known overseas products in these platforms. It is difficult to compete with brands such as Swisse and GNC on these platforms, and so we need to find new ways to promote our products.”
“It is also tougher to control the distribution of our products once we are out in these e-commerce platforms. For all you know, there might be others selling imitated versions of our products,” she said.
Maintaining product authenticity
Wang insists on retaining autonomy of her products by selling only via her Wechat online shop and cooperating with local distributors.
The local distributors do not sell the products and are bound by business contracts – they are to direct consumers back to Wang’s online shop for purchase.
Once an order is made via the online shop, Wang arrange for the delivery of products that are already available in China’s warehouses to her consumers.
Wang also works with social media influencers who enjoy a large following on China app Little Red Book. Since influencers are not allowed to make paid reviews, consumers tend to find their reviews more trustworthy.
Through the model, Wang cuts down advertisement costs, and her products are made known via the word of mouth.
“Chinese consumers dislike hard advertisements, with influencers who promote our product through the word of mouth, we have saved on marketing costs.”
One of the main goal, is to emulate the success of Crystal Tomato – also a Singapore supplement firm which has made waves in China.
Similarly, Crystal Tomato also sells via its exclusive online agent, and any product sales on other e-commerce sites are considered unauthorised.
New e-commerce laws a boon
China announced the steps to regulate its new cross-border e-commerce rules early this month.
Wang believes the new cross-border e-commerce rules will lend a helping hand, instead of restricting her business in China.
She explained that the stricter rules imposed would require daigou traders to abide by stricter rules, as such, limiting the possibility of 1) daigou traders buying and selling her products at exponential prices and 2) the sales of imitated spin-offs.
According to new cross-border e-commerce rules in China, e-commerce sites are required to abide by import and export administrative rules. It also called for the establishment of “a complete set of regulatory system”, which spans across customs clearance, taxation, inspection and quarantine.
Marketing and sales channel aside, Wang emphasised that product safety and effectiveness are nevertheless the main drivers of growth.
Financial and business backing
Innoso caters solely to the female consumers, with products for pre and post-natal care in the pipeline.
This has attracted the interest of Kevin Kwee, a Singaporean businessman who oversees multi-businesses that span across hospitality services, food and beverages, sports and lifestyles, and now has the desire to venture into pre and post-natal facility.
Currently, Innoso is backed back by investments from Kevin Kwee and One Tree Capital – a private asset management firm based in Singapore.
This is also the first time that Kwee is investing in a supplements firm.
Asked the reasons for making the investments, Kwee said that Innoso’s business principles for excellence and refusing to take short cuts, were factors which showed that it is the right project to invest in.
“There are many people trying to take the short-cut in whatever business they are in…But the point is not about making profit, but about doing the best. Profits come naturally when you have good products. It is a by-product of good products,” Kwee said.
Kwee added that he admired Innoso’s pursuit for the best, including undergoing product clinical trials, making necessary product improvements and screening for reputable distributors to promote its supplements in China.
“I run multi-portfolio businesses, if there is something wrong with this project, it will go on to affect my other businesses…Their (Innoso’s) pursuit for the best makes a good sparring business partner for me.”
Future products
At present, Innoso has completed the product development of a supplement product that relieves hangover effects.
Developed with DSM, Innoso intends to launch the product in October, and pre-orders are already under way. Besides a variety of vitamins, the product includes turmeric extract and L-Ornithine HCL, ingredients which enhance liver function and detoxify harmful substances.
In addition, she is working with the Food Innovation & Resource Centre at Singapore polytechnic in developing health foods – specifically plant protein pre-mix that could be used in yogurt, bread and ice-cream.
The premix which is made from rice and pea proteins, is free of soy allergens and have attracted interests from European and American firms, regions where clean eating is in high demand.
