On November 19, H&H Group (1112. HK) CEO Luo Fei announced the Group’s future global development strategy at the “2018 Partner Annual Conference” held in Sanya.

Talking about the many challenges facing the mother and baby industry, Luo Fei believes that the mother and baby industry is now in the VUCA era, namely: volatile, uncertain, complex and ambiguous. “These factors in the current business environment are making companies face higher requirements and challenges when looking to the present or planning for the future.” Luo Fei said.

At the meeting, Luo Fei revealed that H&H will invest 60 million euros to work with French dairy group Isigny to create an investment project with a total production capacity of more than 60,000 tons of infant milk powder – U3, in order to further develop the global infant milk powder market. At the same time, Biostime, the Group’s high-end infant nutrition and health brand, will enter the Australian market.

It is reported that in January next year, Biostime will launch Synbiotic Australian version of organic formula milk powder and synbiotic probiotic products in Australia. Previously, Biostime milk powder has entered overseas markets such as Hong Kong and France.

Luo Fei said that the group’s vision is to “become a global leader in the high-end nutrition and health industry”, and to this end, H&H aims to “achieve global revenue of US$2 billion by 2020”. Achieving this goal depends heavily on expansion opportunities across business product categories. Next, H&H will expand the fields of oral beauty nutrition, snacks, pregnancy preparation mother and baby series, adult probiotics, synbiotic probiotic drops and infant supplements. Among them, Luo Fei will take high-end baby paper urine library and organic baby food as the key objects of the group’s expansion next year.

It is worth noting that the French organic infant food brand Good Goût, which was acquired in the third quarter of this year, also made its official debut at the annual meeting. This is the second layout of H&H in the field of organic food after the acquisition of the American organic brand Healthy Times in 2015. It is understood that Good Goût is a rapidly rising French organic brand in recent years, mainly providing organic complementary food solutions for infants and young children aged 0 to 3, and the brand’s products are expected to enter the Chinese market through cross-border shopping as soon as next year.

Create differentiated BNC products and services

As of September 30 this year, H&H Group achieved revenue of 7.327 billion yuan, a year-on-year increase of 28.2%; Recorded a net profit of $2,745 million, an increase of 27.3% over last year. Among them, infant nutrition and care products business (BNC) and adult nutrition and care products business (ANC), as the two core businesses of the Group, contributed about 58.2% and 41.8% of the total revenue respectively.

On the 19th, Zhu Dingping, Executive President of BNC China of H&H Group, and Liao Wenqi, Director of BNC China Marketing Department of H&H Group, talked about the overall marketing strategy of H&H BNC business in 2019 based on the current consumption environment. Zhu Dingping believes that with the continuous activity of young consumers after 85 and 90, as well as the rise of consumption power in third- and fourth-tier cities, from the popularity of conspicuous to light luxury, from the pursuit of high prices to the pursuit of high quality, from the purchase of goods to the purchase of services from material consumption to spiritual consumption, China is entering the “era of big consumption”.

“Brands are playing an increasingly important role, and whoever can create a desirable brand in the future will be able to win the hearts of consumers and seize the initiative in the increasingly fierce competition.” Therefore, in the maternal and infant industry, differentiated products and services, as well as innovative marketing models, are particularly important. Zhu Dingping proposed that in the future, H&H’s BNC business will start from three aspects: new customer drainage, competitive income and sustainable performance, and become a “leader in imported mother and baby categories”.

In recent years, in the ultra-high-end milk powder segment, organic milk powder, hydrolyzed milk powder and goat milk powder have been very popular, with growth rates of 44.9%, 40.1% and 15.5% in the first half of this year, respectively. Zhu Dingping revealed that in July this year, Jianhe put its organic brand Healthy Times into the Biostime milk powder system, with the help of the latter’s promotion resources and channel resources, Healthy Times organic infant formula increased by 202.4% year-on-year.

Swisse aims to be number one online in 2020

In addition to the infant care and nutrition (BNC) business, the adult care and nutrition segment (ANC) led by Swisse is the key “core” in the “dual core” strategy of H&H Group, and it is also the focus of strategy sharing on the day. According to An Yuting, Chief Strategy Officer of H&H Group and CEO of Swisse China, Swisse is rapidly deploying the Chinese market.

At present, Swisse China accounts for 36.2% of the global Swisse, an increase of 83.6%, and its omni-channel share has increased to 3.6%. Online, Swisse continues to be a leader in China’s online vitamin, herbal and mineral supplement market. Offline, with the continuous deepening of general trade, supermarkets, pharmacies, mother and baby stores, beauty and other channels are also expanding.

According to statistics, since Swisse vitamin D plus calcium tablets got the first “blue hat”, as of the end of October this year, Swisse’s sales growth in supermarkets, pharmacies and mother and baby stores reached 209%, 119% and 111% respectively. “As nutrition products in China continue to grow in double digits, beauty, maternal and child and bone and joint health drive growth. Swisse already has a strong presence in the field of beauty and bone joints, and will further complete the mother and baby layout in 2019. An Yuting said.

According to her, in order to achieve the goal of “becoming China’s No. 1 online and offline nutrition brand by 2020”, Swisse has laid out three aspects: brand, product and channel.

According to H&H’s latest financial report, in the first nine months of this year, the revenue of the ANC sector led by Swisse increased by 29.3% compared with the same period in 2017, reaching 3.063 billion yuan. Swisse’s growth contribution in the Chinese market was outstanding, with Swisse’s active sales in China accounting for 37.1% of ANC’s total revenue from January to September. It is reported that next year Swisse will also make a series of brand heavy investments, including working with new product spokesperson Zhu Zhengting, cooperating with super variety show IP “Wonderful Food Light” and maternal and baby expert Cui Yutao.

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