Jinli Group Holdings Ltd (金麗集團控股) yesterday said that it is branching out from its core apparel business to tap into the cosmetic products market in an effort to diversify its operations.
The company, which owns two apparel and shoe brands in China, said that it is to test the water for its new facial mask products in Taiwan first, adding that it expects the products to boost the company’s sales next year.
The first batch of facial masks are to go on sale at local drugstore chains and online outlets in the first quarter of next year, Jinly said, adding that it expects initial domestic sales to hit 2.5 million units, generating NT$80 million to NT$90 million (US$2.4 million to US$2.7 million) in revenues.
Facial masks have a short production cycle, favorable margins, long shelf life and they match consumer trends in China, the company said on its decision to enter the cosmetics industry.
Facial masks are also the fastest-growing cosmetic product segment in the past five years, it said.
Jinli said construction of the company’s new plant in Zhangzhou, China, is approaching completion, which is expected to begin trial production runs in the first quarter of next year.
“Once the plant is up and running, we expect annual production to reach 100 million units, translating into a potential sales contribution of 1 billion yuan [US$156.3 million],” group chairman Chong Chun-lung (莊春龍) told an investors’ conference.
Although Taiwan’s market for cosmetic products are not expanding as rapidly as China’s, Chong said that facial masks are quickly becoming a favorite souvenir among Chinese tourists.
“The ‘Made in Taiwan’ badge is still valued by Chinese consumers and we hope to begin our marketing efforts with home-bound Chinese tourists,” he said.
Jinli said that sales of the new facial mask line is to be overseen by Leads Bio Co Ltd (領先國際生物科技), a subsidiary in which the company holds a 51 percent stake.
The company is anticipating considerable resource allocation for the venture, but declined to provide further details.
“We are still hiring sales and marketing executives to lead the initiative and working through conflicting schedules with a number of celebrities on endorsement deals,” Chong said.
The facial masks are to be marketed under the brand Lacrima (美愛美), targeting the 20 to 40 age group.
The products would be available in various price ranges, covering the low, medium and high-end markets, with the aim of becoming one of the top-three best selling brands in Taiwan within three years, the company said.
In the first 10 months of the year, Jinli’s revenues rose 0.37 percent year-on-year to NT$4.71 billion. Net income in the first three quarters grew 1.9 percent annually to NT$724 million, with earnings per share of NT$5.62.
Chong said that the company’s earnings would reach a peak this quarter during the traditional high season and that he expects profits to see moderate growth next year.
He declined to provide further guidance.
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