B2C move: BioGaia setting up subsidiary firms to oversee direct distribution in ANZ
The two subsidiaries will be formed later this year.
BioGaia sees such direct business-to-consumer (B2C) model as a key growth strategy globally.
It has already introduced this model in Japan, the US, Canada, and the UK, and said it hoped to replicate the success elsewhere.
“Expansion through direct markets is part of BioGaia’s strategy. This means that we, BioGaia, control sales to the consumer either via our own e-commerce, pharmacies, or marketplaces such as Amazon,” Ben Wright, BioGaia Australia & New Zealand CEO said in response to queries from NutraIngredients-Asia.
Doing so also gives the company data and insights on consumer behaviours. This could then be useful in product launches and marketing.
“This strategy has been successful and has given us more flexibility for product launches, marketing, and collecting and analysing consumer insights and behaviors.
He added that the company has adopted omni-channel approach and aimed to be available in whichever channels that consumers used.
“We leverage synergies and learnings from our other direct markets and make market adaptations. We have an omnichannel approach in each market, meaning we aim to be where the customer is, whether online or offline.
In Australia, BioGaia’s probiotics are currently available in pharmacies such as Fitch’s Pharmacy, David Jones Pharmacy, and practitioner only channel Bio-Practica.
In its Q1 financial results, the company traded on Nasdaq Stockholm, announced that sales in the Asia-Pacific region was up six per cent year-on-year to SEK85.8m (US$8.11m).
China, Indonesia, Thailand, and Japan were the key growth engines, especially for paediatrics probiotics. Sales from the paediatric segment in APAC in Q1 was SEK 57.7m (US$5.46m) higher than SEK 51.1m (US$4.84m) recorded last year, while that of adult health was SEK 25.5m (US$2.41m) down from SEK 27.3m (US$2.59m) last year.
In China, for instance, the company has found success through product livestreaming on JD, Tmall, and TikTok.
Elsewhere in Japan, its focus is on the dental consumer market, although it is also developing its omnichannel strategy.
In Australia and New Zealand, Wright noticed that consumers have a good knowledge of probiotics and its health benefits and have shown substantial interest in probiotics.
“BioGaia is a Swedish, world-leading probiotic company with clinically proven probiotics recommended by healthcare professionals worldwide. We are confident in our ability to grow in these markets,” he said.
BioGaia in APAC
As compared to other regions, BioGaia’s sales in Asia-Pacific are more evenly distributed between its paediatric and adult health segment.
Last year, the paediatrics segment contributed 58 per cent of its APAC total sales, while another 40 per cent came from adult health.
The EMEA and Americas regions, on the other hand, have over 80 per cent of their sales coming from the paediatrics category.
Protectis Probiotics for infant colic and digestive comfort is BioGaia’s flagship paediatric probiotic product.
Sales of Protectis Probiotics had increased primarily in China, US, and Canada, although it had decreased in EMEA, mainly in Italy and France.
