Fri, Dec 08, 2017 - Page 12 News List

Dr Wu Skincare sales up 6%

By Ted Chen  /  Staff reporter

Dr. Wu Skincare Co Ltd (達爾膚生醫科技) yesterday said it would continue to revamp its business strategy, after sales last month rose 6 percent annually to NT$138 million (US$4.6 million), ending a run of decline that began in April and marking a new monthly record.

The company attributed the gain to contributions from China, mainly driven by last month’s “Singles’ Day” shopping festival.

However, aggregate sales in the first 11 months slipped 16.2 percent year-on-year to NT$883 million, while net income in the first three quarters fell 53.3 percent annually to NT$119 million, with earnings per share dropping from NT$4.88 to NT$2.29.

“We have been under tremendous strain in the first three quarters, but our strategic changes began bearing fruit last month,” chairman Eric Wu (吳奕叡) said at a news conference in Taipei.

Apart from macroeconomic factors such as softer consumption growth and a sharp drop in Chinese tourists, missteps by the company have also impacted its earnings, he said.

Throughout this year, the company was overly fixated on rapid growth and expansions while neglecting mounting costs and its core customer base, Wu said, adding that the firm’s expenditure did not yield the desired gains.

This year, the company gained 5 percent in sales from launching 24 new products. This was lower than the 8 percent gain made last year with just 20 new products, company data showed.

Securing listings on China’s major e-commerce platforms and brick-and-mortar retailer chains incurs tremendous costs, Wu said.

As inventory began piling up and depreciation increased, margins for its China operations dipped into the red, while customers are becoming increasingly indifferent to promotional tactics, Wu said.

In addition, consumer behavior is changing rapidly and becoming fragmented, while direct sales over social media platforms have begun to challenge conventional physical and online retail outlets, he said.

Wu said the company would halt expansions to other product categories such as facial masks and cosmetics, but focus its expertise on skincare and active dermatology products. The company would also focus spending on sales channels, as opposed to brand promotion, he said.

Overall, the company plans to launch 29 new products and raise sales growth contribution by 9 percent next year, he added.

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