Chlitina Holding Ltd (麗豐), which manufactures and sells beauty and cosmetic products through its salon franchise in Taiwan and China, is looking to expand to Vietnam with the help of Taiwan’s new immigrants.
The company, founded nearly 30 years ago, said that a number of its high-performing franchisees in Taiwan are new immigrants from Southeast Asian nations like Vietnam who are married to Taiwanese, investor relations director Anita Hu (胡安榕) told an investors’ conference in Taipei yesterday.
“We hope to replicate in Vietnam our success in China by recruiting a number of Taiwan-based compatriots and training them as seed instructors to oversee the company’s training program in the country,” Hu said.
Chlitina expanded into China in 1997.
At the end of the first quarter, the company had a total of 4,079 salon franchisees, a majority of which are based in China, thanks to a common language and cultural similarities.
The seed instructors are expected to help smooth out potential problems and overcome language and cultural barriers as the company moves to establish a foothold in Vietnam, Hu said.
At the end of March, Chlitina had 30 franchisees in Vietnam, which is expected to spur sales growth in the next three to five years, she said.
The company operates a capital-light business model that does not extend financing or credit for inventory to franchisees, with each franchise store generating between 46,000 yuan and 55,000 yuan (US$7,197 and US$8,606) each quarter, Hu said.
Other growth drivers include a cosmetic clinic in Beijing under the Up Lider (雅樸麗德) brand, which specializes in distributing medical-grade products to clinics, she said.
The company will also continue to promote its Xinmeili (新美麗) e-commerce platform to offer a broader product mix to customers, she added.
Gross margins at the company’s salon franchisees average about 80 percent, compared with 65 percent for online channels.
The company expects sales momentum in China to be supported by a rising disposable income per capita, which grew faster than 7 percent last year, Hu said.
Chinese spending on beauty spas and hair salons also rose by 8.8 percent, she said.
The company reported that first-quarter net income surged 235.47 percent annually to NT$312 million (US$10.4 million), or earnings per share of NT$3.97, on revenue of NT1.01 billion, up 41.09 percent.
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