Thursday, 18 June 2009

Hai-O sees growth despite slowdown

Wednesday June 17, 2009
Hai-O sees growth despite slowdown

Aggressive marketing, MLM to help boost sales

KUALA LUMPUR: Hai-O Enterprise Bhd, a wholesaler and retailer of Chinese herbs and medicine, expects to achieve 10% growth in revenue this year despite the global economic slowdown. (Comment: In previous years, the guidance had been 20% growth in revenue per year.)

Managing director Tan Kai Hee said the positive outlook was based on the adoption of an aggressive marketing strategy and support from its multi-level marketing (MLM) division.

“We will make use of our existing marketing tools and put in more budget for advertising and promotion (A&P) activities,” he said after the signing of a sole distributorship agreement between Hai-O and Yunnan Baiyao Group Co Ltd yesterday.

The company allocates about RM5mil a year for A&P activities.

For the financial year ended April 30, 2008, Hai-O’s revenue jumped 97% year-on-year to RM373.8mil, of which 70% came from the MLM division.

For the nine months ended Jan 31, its revenue rose to RM302.33mil from RM240.27mil in the previous corresponding period.

Tan said the company was still positive on its growth although it expected to see a decline in consumers’ purchasing power due to the recession. “We will make more aggressive efforts to achieve it,” he said.

He said Hai-O hoped the strategic alliance with Yunnan Baiyao, a traditional Chinese medicine manufacturer, would boost the company’s long-term commitment to helping Malaysians pursue a healthier lifestyle.

Under the agreement, Hai-O would be responsble for the introduction of 19 Yunnan Baiyao and Yun Feng brands of products.

Tan said the products would be introduced to the local market in the second half.

“Besides Hai-O’s 60 chain stores and major Chinese medical halls nationwide, the products will also be sold at hypermarkets and major pharmacies,” he said.

Yunnan Baiyao overseas business general manager Wei Bo said the company was confident its products would be well-received in Malaysia.

“This is a long-term partnership with Hai-O and we expect to record yearly sales of RM10mil from the Malaysian market,” he said. — Bernama

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