Sat, Feb 09, 2019 - Page 5 News List

China still vital market, despite slowdown: GoPro

Bloomberg

GoPro Inc chief executive Nick Woodman speaks during a Bloomberg Television interview in San Francisco, California, on Thursday.

Photo: Bloomberg

GoPro In CEO Nick Woodman still sees China as an important market and growth opportunity for the action camera-maker, despite an economic slowdown in the world’s second-largest economy.

“China was more challenging last year, but we still managed to grow 2 percent,” Woodman said in an interview with Bloomberg TV on Thursday. “We have sales and marketing offices in China, and operations as well — it’s an important hub for us.”

Sales from the Asia-Pacific region are a boon for GoPro, with growth rates in Thailand, South Korea and Japan running several times faster than in China, where consumers have cut back on purchases of everything from iPhones to air conditioners.

GDP in the final quarter of last year rose at the slowest pace since the global financial crisis, amid a trade fight with the US that continues to drag on.

To avoid potential tariffs, GoPro is moving most of its US-bound camera production out of China. Starting in the second quarter, that production would shift to Guadalajara, Mexico.

Woodman said that even without tariffs, the company would save money with the move.

“China is getting more expensive to do business in,” Woodman said. “There are some cost benefits to moving some of our production to Mexico. There’s supply chain benefits.”

“Malaysia was a consideration, but at the end of the day Mexico’s got terrific infrastructure,” he added.

GoPro on Wednesday reported net income, excluding certain items, of US$42 million, snapping several consecutive quarters of losses.

Sales jumped 13 percent to US$377 million, exceeding analysts’ estimates of US$374.3 million.

The company has been trying to generate revenue from a GoPro Plus subscription service that automatically uploads pictures and video footage to an account online. GoPro now has 199,000 active paying subscribers, up more than 50 percent from a year earlier. Woodman said the software service is already having a meaningful impact on the company’s gross margins.

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