Larger spending: BYHEALTH rides on China’s VDS market expansion with profit up 15%

14-Mar-2022 - Last updated on 17-Mar-2022 at 02:05 GMT

Last year, consumers in China spent about US$20 per person on dietary supplements, up 6.3 per cent yoy, according to Euromonitor. ©Getty Images

China’s largest vitamin and dietary supplement (VDS) firm BYHEALTH is reaping the benefits of an expanding domestic market, as it reported yet another record year of profit and revenue growth.

The company said in its FY2021 report that net profit attributable to shareholders was up 15.07 per cent from RMB$1.52bn (US$241m) to RMB$1.75bn (US$277m).

Total revenue climbed 21.93% yoy from RMB$6.09 (US$965m) to RMB$7.43bn (US$1.18bn).

In fact, the growth rate from FY2021 was higher than that of FY2020 – when revenue was up 15.83 per cent.

Citing data from Euromonitor, BYHEALTH said that the scale of China’s VMS industry in 2021 was RMB$189bn (US$29bn), an increase of 6.6 per cent.

Taking the top spot, the company is enjoying a 10.3 per cent market share of China’s VDS sector.

This is significant a gap from the companies in the second and third place – where their market share was six and five per cent respectively.

“As compared to the previous year, the gap between BYHEALTH and the competitors have increased,” board chairman Liang Yunchao said.

The growth in China’s VDS market is related to more generous spending from consumers.

Last year, individuals spent about US$20 on dietary supplements, up 6.3 per cent.

This was slightly higher than the global average and about one-fifth of individual spending in the US.

Across the sector, there was not much changes in where consumers made their purchases – offline or online. However, the direct-selling channel shrunk last year.

Product sales

The bestselling products from BYHEALTH are still its protein powder and joint health brand Keylid.

Its same name protein powder brand ‘BYHEALTH’ saw revenue increased by 24.36 per cent to hit RMB$4.45bn (US$703m).

Joint health product ‘Key-lid’ went up 7.46 per cent in terms of revenue to RMB$1.41bn (US$223m).

Locally produced probiotics under Life-Space – a brand acquired from Australia – reported revenue growth of 36.33 per cent to RMB$184m (US$29m)

Offline retail remains the major sales channel for the company, with 64.29 per cent of its revenue coming from this channel – a growth of 8.58 per cent.

Revenue from online retail, on the other hand, had increased by 45.88 per cent.

Upcoming plans

BYHEALTH is setting up a health and nutrition research institute in Shanghai and also an AI research centre this year.

This is part of the company’s strategy in using novel technology for its product development.

In addition, the company plans to launch an innovative functional product using novel technology every two to three years.

For instance, in last December, it managed to extract procyanidin C1 (PCC1) for anti-ageing from grape seed.

This was born out of a joint research between Shanghai Institute of Nutrition and Health and America’s Mayo Clinic.

According to a mice study published on Nature Metabolism, the ingredient is said to increase the health span and lifespan of mice through its action on senescent cells.