This article is from WeChat public account: Fast Consumer (fbc180) , author: Zhang Xia Yu, Photo by Brandless on Unsplash
Last year, health care and nutrition companies were not doing well. So much so that “China’s local tyrant” Tomson Beckham bought Australian Internet celebrity nutrition brand Life Space at a 34 times premium. Who would have thought that the “baby” bought back at a high price has now become a stumbling block to its performance.
New Year’s “Burning Thunder”
A notice of the first annual loss since listing has wiped out the welcome joy of many shareholders holding “Thomson times health”.
Not long ago, Tomson Health said that due to the implementation of the “E-commerce Law”, Life-Space Group Pty Ltd in 2019 (hereinafter referred to as “LSG”) < The business in the Australian market did not meet expectations. It is expected that provision for impairment of goodwill and intangible assets will be about 1 billion to 1.05 billion yuan. The full year 2019 loss will be about 365 million to 370 million yuan.
Thomson Bejian is a domestic manufacturer and distributor of nutrition products. It has its own brands “Thomson Bejian”, “Jianliduo”, “Jinshijia”, “Jianleduo”, “Natural Doctor”, Products include protein, vitamins, minerals, natural plant and animal extracts, and other functional dietary supplements.
Through the foregoing announcement, it is known that the performance of Tomson Beacon’s “explosion” was mainly caused by the failure of its subsidiary LSG to meet expectations. However, at the beginning of the acquisition, LSG appeared as a “corner”.
At that time, Australian nutrition products were widely sought after in the country.
In order to reach the acquisition, Tomson has not “conceded”, not only paid a high amount of cash, but also changed the use of fundraising for 550 million yuan, with a purchase price of more than 3.56 billion yuan (LSG’s 2017 net assets were only 101 million yuan, and the purchase premium was as high as 34 times) Finally, “Let’s mention” LSG.
On the other hand, the original shareholders of LSG did not even sign the performance commitment agreement, and they completely withdrew from LSG.
The costs are naturally to achieve the “blueprint”.
At that time, Tom Johnson ’s “situation” was that the industry as a whole had a good growth rate, but the company ’s main product, collagen powder, vitamins, and protein powder, was on the track where the overall growth rate was declining. Tomson BJ needs to enter a new segmented track to provide support for future performance growth.
Euromonitor data shows that probiotics are a fast-growing category in the health care product segment and are new in recent years. In 2017, China’s probiotic supplementation scale was about 3.5 billion yuan, a year-on-year growth rate of over 19%, far exceeding the industry growth rate. At the same time, in this field, China’s industry concentration is about 10%, and there is no absolute leader. It is a blue ocean market in the early stage of development.
LSG started to enter the Australian probiotics market in 2012. By 2017, it had become the second-largest probiotics brand in Australia, and has accumulated a certain amount in the country through cross-border purchases, Haitao and other channels. Reputation. In addition, the main products of LSG are powders and capsules. Among the revenue structure, the most are tablets, powders and capsules are relatively weak.
“To a certain extent, LSG not only meets Tomson’s development needs, but also adds powder and capsules. The two sides can be described as a hit.” An investor said.
Who ever thought that Australian nutrition products were still “popular” in the country the next moment, and the next moment, they were coming.
Vent stop reduction?
In the past few years, many Chinese students and overseas Chinese in Australia have used purchasing as a sideline. The products purchased are not only Australian health products, but also infant formula, snacks, skin care products and so on.
For domestic consumers, compared with domestic e-commerce brands, Australian personal purchasing prices are much better and there are more options. In this way, the prosperity of the purchasing industry has been formed, and many brands have been “achieved”.
This prosperity is not only reflected in the emergence of personal purchasing agents, the establishment of large cross-border purchasing groups, but also the increase in the number of companies looking for Australia. Among them, the most enthusiastic in the industry is Jianhe Group, which has obtained swisse and made rapid progress.
But good times are fragile.
Early last year, the domestic “E-commerce Law” was implemented. Some people say that this puts a yoke on cross-border purchasing. Due to stricter supervision and tax burden, according to the Australian newspaper, many Chinese consumers have switched from Australian retailers to Chinese local businesses; the performance of an Australian nutritional company in China has fallen by 15%, and its export channels through purchasing agents have shrank About 40%.
The performance of LSG acquired at a high premium is naturally affected. Data show that in 2019, LSG’s Australian and New Zealand business is expected to achieve A $ 29.431 million in revenue, a year-on-year decrease of 57.9%, resulting in an overall LSG revenue decline of 42.6% year-on-year. LSG’s current owner, “Dad” Tomson Beacon, further impaired goodwill.
In the end, the “wind” of Australian nutrition is weaker. According to Australian health product giant Outrigger (Blackmores) , in the second half of 2019, Outrigger’s sales in the Chinese market have been severely blocked for reasons It is “Chinese consumers generally lose interest.” At the same time, Blackmores’ share price hit its biggest drop since its listing 30 years ago.
Specifically, Aojibao’s previous sales model, which relied heavily on purchasing, was unsustainable. In order to re-enter the Chinese market, cooperation with Chinese companies has become one of the “new recruits”. Even when Mengniu acquired Bellamy, some media began to admire Aojiabao, saying that “Aojiabao” is the ideal nutritional brand for Australians in Australia.
Only, the LSG case is ahead, and ambitionists who are willing to take risky acquisitions may have a little more consideration than before.
New track
The prosperity of Australian nutrition products is also the epitome of the rapid growth of the domestic nutrition industry.
Data shows that as of 2017, China has leapt to the second largest healthcare product market in the world, with a market size of about 131.5 billion yuan and a compound growth rate of 11.5%, which is much higher than the global average growth rate of 6.0%. .
Director of the direct sales giant Amway De Divis once said: “The future of Amway must depend on China, because China is Amway’s largest market, and the Chinese market is the growth point of Amway.” As early as 2013, Amway China achieved Sales of 29.3 billion yuan accounted for the majority of Amway’s global market sales and contributed nearly 40% of revenue.
“It can be said that Tomson’s management’s market sense is extremely acute. This has also prompted its subsequent series of transformations, the development of online retail, the acquisition of overseas nutrition companies by large sums, the establishment of joint ventures, and large single products. Strategy. “An investor said.
In 2013, the domestic e-commerce industry developed rapidly and demand increased. That year, Tomson Biokin laid out an e-commerce business. By 2017, Tomson Biokin proposed a large single product and e-commerce branding strategy, and increased e-commerce channels. Exclusively for products, developed to 2018, in order to increase penetration and increase product marketing efforts, Cai Xukun was signed as a brand spokesperson.
Seeing the prosperity of overseas nutrition products, Tomson Biokin acquired Bayer’s children’s camp with a history of more than 50 years for about 100 million yuan.Business asset of the nutritional supplement brand Penta-vite. Three months later, Tomson completed the acquisition of Australian probiotics brand Life-Space. These two brands have accumulated a certain number of consumers in China, especially in first- and second-tier cities.
However, at the same time as the rapid development of the nutrition industry, there are also many uncertain factors, especially in terms of supervision. For example, those overly exaggerated propaganda methods on the market have repeatedly plunged the industry into a “mixed reputation.” However, cross-border purchases, which have emerged in recent years, also face the problems of including supervision and standardization.
The state has successively introduced different policies, including the “New E-commerce Law” and “Hundred Days Integration”.
“Obviously, the tightening of policies is a big change for the nutrition industry. Companies need to adjust and adapt to the new environment in a timely manner. But from another perspective, stricter management will help the industry clear and improve The market concentration has made the industry’s Matthew effect obvious, “said an investor analyst.
This is a challenge and an opportunity for leading companies in the industry, such as Tomson.
Although stricter policies have led to pressure on Tomson ’s performance, in the long run, the company has no “explosion” in terms of products and personnel in standardized industry competitions. It is more likely that it will make a smooth transition in 2020.
This article is from WeChat public account: Fast Consumer (fbc180) , author: Zhang Xia Yu