Mon, May 30, 2011 page11

• FEATURE: Osim eyes Asia expansion on rising health awareness

  • By Jason Tan / Staff Reporter
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  “Sipping a cup of coffee [on the sofa] and chatting with your friends … Relaxation is the new fashion. Enjoying a massage, enjoying the new fashion,” Taiwanese model Lin Chih-ling (林志玲) says in a massage sofa commercial for Osim International Ltd (傲勝國際).

  In another TV commercial, actress Chen Mei-fong (陳美鳳) says: “I have many items of clothing, but if you want to ask me which one is the most comfortable, no doubt it is Osim’s shoulder massager.”

  Stan Shih (施振榮), the founder of Acer Group (宏碁集團), recalled at a Taipei forum in 2007 that he came across a massage chair made by Osim a decade ago and mistook it for a sophisticated Japanese product.

  Shih was surprised when he found out during a business trip to Singapore that Osim was actually a Singaporean brand. He has an Osim massage chair at home.

  Osim is quickly becoming a force to be reckoned with in the Asian healthcare and lifestyle industry.

  The company first came to -Taiwan in 1987 when it set up counters at Pacific Sogo Department Stores (太平洋崇光百貨). Osim now has specialty stores across the nation that beckon to passing customers to come inside, take a break and enjoy a massage.

  “We have been in Taiwan for 25 years. Some of our promoters joined us as young ladies, and now are mothers,” Ron Sim (沈財福), Osim founder and chief executive officer, said at a May 19 conference in Taipei held to brief investors about its share-listing plans.

  He said Taiwan — along with Hong Kong and China — was a very important market to Osim as it branches out from Singapore, a city-state with a population of just 5.1 million.

  Osim’s predecessor was R. Sim Trading Co Pte Ltd, a distributor that sold handheld massagers and foot reflexology rollers. It was founded in 1979, when Sim was 20 years old.

  Sim decided to distribute his products in Hong Kong in 1986, a year after Singapore was hit by a financial crisis.

  “Singapore was a small market, and the population was not large enough to sustain the business,” he said.

  Keeping a startup alive amid difficult economic times showed Sim that his distribution company had found a niche. This realization gave birth to the Osim healthcare brand in 1994.

  Sim said he had to venture into branded business to manage “the company’s own fate.”

  In 1995, it launched into a joint venture with Daito Electric Machine Industry Co, a Japanese contract maker of Osim, by taking up a 30 percent stake in the manufacturing plant in Suzhou, China. This provided Sim with a research, development and manufacturing unit, and made him a priority when it came to getting orders dealt with.

  Spicing up Osim’s offerings with a “blockbuster” product launch every three months is a surefire way to keep customers coming back, Sim said.

  One of its products, the iSymphonic — the industry’s first massage chair that synchronizes massage and music — was voted “Invention of the Year” by Time magazine.

  There are new products in the pipeline, including an Internet massage chair, special edition massage chairs for fashionistas and music lovers and an ambient air purifier.

  Today, the Singaporean firm claims to be a leader in the “well-being and lifestyle” industry, with five brands — Osim, GNC, RichLife, Brookstone and TWG Tea — promoting products from massage chairs, treadmills, air purifiers and vacuum cleaners to health supplements and high-end tea products.

  Its latest acquisition took place last month when it announced it would buy a 35 percent stake in Singapore’s luxury tea brand TWG Tea Co for S$31.36 million (US$25.4 million).

  Osim will hold a 60 percent majority stake in a newly formed joint venture with TWG Tea, which will cover markets in China, Hong Kong, Taiwan and South Korea.

  This is in line with TWG’s plan to tap into growing demand for luxury brands coming from Asia’s growing middle and upper income households, it said.

  With its first TWG Tea Boutique opening in Hong Kong in August at the IFC mall, the firm plans to open in Taiwan by early next year.

  Next month, it plans to debut Taiwan depository receipts (TDRs) to raise NT$1.77 billion (US$61.4 million), further lifting its profile in Taiwan.

  The massage chair maker’s business is especially picking up steam throughout China.

  Osim first flexed its muscles in China in 1993. As of the first quarter this year, it had 269 OSIM stores spread across 42 first and second-tier cities. Sim said it was opening 50 to 60 outlets a year to tap in to rising health consciousness among Chinese and their increasing spending power amid a stronger economy.

  It has 107 RichLife shops selling health supplements in China and wants to open 100 more shops a year.

  “You would be amazed by the spending power of the rich in China. They walk into our stores and demand nothing but the best — with cash in hand,” Sim said.

  Unlike clientele in Hong Kong or Singapore, where 80 percent of customers purchase Osim products with monthly installment plans, almost 90 percent of Chinese customers pay in cash, he said. With more Chinese getting used to installment payment plans, Sim believes Osim will reach out to newer clientele with mid-level spending power in the future.

  According to statistics from the China Health Care Association (中國保健協會), Chinese sales of health supplements expanded to US$13.4 billion in 2009, from US$5.9 billion in 2006. China overtook Japan as the world’s second-largest supplement consumer after the US.

  Meanwhile, Fubon Securities Investment Services Co (富邦投顧) projected that sales of massage chairs in China will rise by 30 percent of compounded annual growth rate every year.

  Japan, the world’s most developed market for massage chairs, has one of these machines per every two households, whereas China’s massage chair sales accounted for 1 percent of the total population in 2007, Fubon Securities said in a report on May 13.
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