Simon Evans, 02 November 2015
A Sydney company that sells well-known Australian vitamins, health products and biscuits, including Blackmores, Swisse and Arnott's Tim Tams, on the internet in China is generating $30 million in revenue after just four years.
CarePlus, which operates from headquarters in Sydney's north-west suburb of Castle Hill and runs warehouses in China servicing the demand from online sites such as Tmall, operated by web giant Alibaba, sells around 100 different products. Chief executive Patrick Liu says sales of health foods are starting to grow faster than vitamins.
The business model used by CarePlus of having a major presence on the Chinese language e-commerce sites is similar to that of Jessica Rudd, daughter of former Prime MInister Kevin Rudd, who has achieved success with the Jessica's Suitcase online business, selling mother and baby products, such as organic baby food and natural skin care products through websites in China.
Mr Liu says the CarePlus business generated 120 per cent growth in sales last year and about 75 per cent of the business comes through the Tmall site. "That gets most of the traffic," he says.
Clean and Green
One of the main drivers is the increasing appetite from rising numbers of middle-class Chinese for "clean and green" vitamins and food products from Australia, after a series of contamination scares in China over the past years from Chinese manufacturers.
"People are adopting a more healthy lifestyle," Mr Liu says.
He says about 50 per cent of sales from CarePlus come from vitamins. Two of the biggest brands it sells are Swisse and Blackmores. Mr Liu says his firm buys the vitamins from the firms and then uses its own channels to sell on the Chinese language websites.
But one of the fastest growing products is Lowan oats. "Right now, food is catching up," Mr Liu says.
Mr Liu says the online retailing model is working well for CarePlus and in the early days had represented a low-cost option without the need for heavy investment in bricks and mortar infrastructure.
"It's a low-cost option; it's a low-risk option," he says.
The two big Australian vitamins brands of Blackmores and Swisse have been at the forefront of extraordinary growth in vitamins sales to China from Australian makers. Swisse was sold in mid-September to Hong Kong-listed Biostime International for $1.67 billion, while Blackmores shares briefly went through the $200 mark last week, after revealing a sharp increase in profit growth and a new joint venture to make infant formula with Bega Cheese. The Blackmores brand has been bolstered by a marketing tie-up with retired Chinese tennis star Li Na.
View our CarePlus case study here.