Niche yet cheap: New Singapore sports nutrition e-commerce retailer focusing on scale and halal products
Nutri X, which began operations in late February this year, claims to stock the largest whey protein and halal sports nutrition supplements in Singapore.
Its other main product categories include amino acid supplements and pre-workout creatine. It will also be bringing in multivitamins and niche sports nutrition products, including more halal supplements.
Currently, Nutri X operates solely online, taking orders through its web store.
Cutting costs for the consumer
Founder and CEO Woo Zhong Ye told NutraIngredients-Asia that the company’s main aim was to “pass on cost savings to the consumer”.
"I realise that a lot of companies, especially distributors in Singapore, do not have the scale to buy directly from the manufacturer. I am working towards being able to do so, I can get the best prices for my customers.”
As part of his cost-saving strategy, Woo is running a one-man show to keep Nutri X going. He outsources the majority of its back-end operations — such as warehousing, stocktaking, deliveries and logistics — to third parties, and is looking to hire a part-timer to provide in-house support.
He believes a lean internal structure is important, saying, "If the organisation grows too big, it would defeat the purpose of being able to sell supplements at lower prices."
He also intends to continue outsourcing other aspects of the business, such as marketing, sales, and finance. However, he is keen on eventually hiring tech support, as Nutri X is reliant on its e-commerce channel.
Still on the topic of cost-saving, he added: "If you look at the characteristics of the industry, retail prices relative to volume are quite low, so it's not very commercially viable to import certain products.
“Some companies cut out the middle man — people like me, basically — to bring down the cost of their products as much as possible, but once you factor in delivery costs (which makes up a large proportion of total costs), their retail prices are still quite similar to those of other brands."
Expanding beyond e-commerce
Woo said there was a definite plan for Nutri X to expand offline, as an online presence alone would not be enough to sustain the business in the long run.
He noted that many other market players had adopted an omni-channel strategy, and he intended to keep up with the competition.
"I want to make Nutri X a major platform for sports nutrition products and services, so there will be other areas to venture into once the e-commerce portion has been established.
"At the moment, I'm still looking for a physical space. Rent in Singapore is pretty high, and I would like to offer customers a different retail experience.
“There are many ways to develop this, and the physical outlet shouldn't just be an alternative sales channel. It should be an outlet where I can bring more value to customers."
However, this aspect of Woo’s business strategy is still in its infancy, and he declined to go into further detail.
Niche needs
Apart from competitive prices, Woo felt the need to offer more niche products for Nutri X’s customers. He responds to customer feedback directly through social media, and has found that halal sports nutrition products to be the most sought-after.
“Larger distributors usually require a larger demand for a certain brand or product type before they are willing to stock it, because they lack the flexibility I have at the moment,” he said.
"There are not many halal supplements on the market. The three main brands are Agym Nutrition from Malaysia, International Protein from Australia, and Biotech USA. They are similar in terms of quality, but the main difference is their cost of manufacturing.
"My own perception is that the consumers in South East Asia are just starting to gain more exposure to the vitamins and supplements market, so they tend to be more price-sensitive, and prefer to stick to Agym Nutrition for their halal supplements."
He plans to bring in more varieties of halal supplements, relying on further market research and continued customer feedback to inform his decisions as to which brands and product types to stock.
Private label profit?
As to whether or not Nutri X will launch its own brand of sports nutrition products, Woo prefers to take a more cautious approach.
"The rationale for most retailers to start their own private labels is that the profit margins are greater (compared to simply selling other brands' products).
"The downside is that they may end up competing against the manufacturers whose products they are distributing, thereby cannibalising their own sales. Some companies that have tried it have had manufacturers pull out of distribution agreements with them."
Still, he is open to the idea of starting a Nutri X private label, on the condition that it includes only products in categories in which the company is not already distributing.
He said ready-to-drink protein, as well as protein bars, would be on his radar if he were to go ahead with the idea.
"Most brands that sell such products are based in Europe and the US, and importing from these countries to Singapore tends to make them very expensive to buy here. The resources required to keep such products fresh during import eats into the costs borne by the retailer, leading to even higher retail prices.
"As South East Asian consumers are still price-sensitive, they are unlikely to want to buy such products."
