Companies

Guangdong By-Health to boost sales, add outlets

By Li Wenfang (China Daily)
Updated: 2010-09-19 11:27

GUANGZHOU - Nutritional supplement maker Guangdong By-Health Biotechnology Co plans to have 20,000 outlets in China and achieve sales revenue of more than 5 billion yuan ($744 million) over the next three years.

The company, a major player in the non-direct selling nutritional supplement market, reported revenue of more than 1 billion yuan and had 9,000 outlets last year. It has also posted average annual growth of more than 50 percent in the past six years, said Chairman Liang Yunchao.

Guangdong By-Health plans to be among the top three companies in the nutritional supplement business over the long term as more and more foreign companies are expanding their presence in the domestic market.

An aging Chinese society, increased health awareness and richer population have been propelling the demand for nutritional supplements, Liang said.

Drug stores in China, which total more than 360,000 and focus on the non-pharmaceutical business, are facing decreasing profit margins due to the healthcare reform, he said.

Per capita disposable income of the urban population grew by 9.8 percent to 17,175 yuan in China last year, according to official data.

Liang said companies will need to focus more on brand building and distribution channels for growth.

Guangdong By-Health plans to spend 123 million yuan on brand promotion over the next three years.

The company has also roped in celebrities such as Olympics medal winner for gymnastics Liu Xuan and popular basketball star Yao Ming to endorse its products.

It will also further segment its clients and roll out tailor-made multi-vitamin products in 2012. The outlets are operated by the company or through distributors.

Guangdong By-Health has also set up nutrition centers that offer health guidance and will grow them to 600 from 164 in three years.

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To safeguard the quality of its products, Guangdong By-Health will step up global sourcing of materials and plans to start acquiring material bases at home and abroad next year.

More than 54 percent of its raw materials were sourced from overseas markets during the first half of this year, and the proportion is expected to reach 80 percent in three years.

It deploys up to 4 percent of its revenue for research and development and has a team of more than 50 employees.

To facilitate the expansion, the company will start building the third phase of its production base in Zhuhai, Guangdong, later this month.

The company was restructured in 2008 for going public on the domestic bourses, Liang said, declining to give more details.