http://www.smh.com.au/business/retail/tap-into-new-golden-age--swisse-chief-20160727-gqewjf.html
- July 28 2016 - 12:15AM
- Save
- Print
Swisse chief Radek Sali urges Australia to tap into 'new golden age'
Swisse Wellness chief Radek Sali is urging Australian businesses to tap into the new golden age of trade with China after revealing Chinese consumers account for half of the group's total sales despite officially launching its brand in Shanghai only this month.
As the Australian economy resets to the post-mining boom conditions, Mr Sali said Australia was uniquely positioned to prosper from Chinese consumer appetite for premium brands.
Why the Chinese are swallowing Blackmores
Chinese tourists want Australian products, but why do they insist on buying them in person?
"I think it's the dawn of a new golden age for goods and services that trade from Australia, and those businesses that are awake to it and put in strategies ... that take advantage of this amazing opportunity, will be in a very strong position," Mr Sali said.
"There's this [Chinese] middle class that's 300 million strong and growing at a rate of 5 million every five years, I don't see many other demographics or profiles from other countries that have similar opportunities.
'The Chinese in particular, have a thirst for high-quality premium brands.' Photo: Janie Barrett
"This is a very exciting time for Australian companies that think China."
Trans-Tasman dairy group a2 is also basking in the new dawn, with chief Peter Nathan describing Chinese demand for premium Australian food products as a "mega trend" and very different to the mining boom.
Speaking at the Australian Business Forum's Australia-China BusinessWeek function, Mr Nathan said the mining boom was always going to "hit a ceiling" at a certain point in time when construction concluded and demand for commodities and materials tailed off.
"We see the demand for quality food products from our part of the world as being a long-term trend," Mr Nathan said.
Swisse chief executive Radek Sali is urging Australian businesses to tap into the new golden age of trade with China. Photo: Luis Ascui
"The Chinese in particular, have a thirst for high-quality premium brands that provide real and perceived health benefits so on that basis we see it as a long-term opportunity.
"If you have a premium brand you are in a very different space to a commodity, which is subject to the vagaries of the commodity price cycle."
Mr Nathan said he was confident a2's brand was unique enough to prosper and grow in the Chinese market, which he said was still growing with about 24 million new babies born every year.
"There will always be competitors in the segment as there always have been but we are very confident about our ability to communicate and be relevant to consumers."
This is a very exciting times for Australian companies that think China.
Radek Sali, Swiss Wellness chief
In Australia, a2 milk sales have been boosted by the social media campaign targeting $1 milk at Coles and Woolworths,
triggered by Murray Goulburn's savage cuts to farmgate milk prices in April.
A2 would not quantify the sales boost but Mr Nathan said it had "enjoyed a lot of support on that basis."
Swisse's majority Chinese owner, Biostime, this week announced an internal restructure that will shift the bu-out rights for minority shareholders, including Mr Sali, into a separate structure.
Biostime negotiated to take an 83 per cent stake in Swisse in 2015,
in a deal that valued the operation at a staggering $1.67 billion.
Mr Sali said the restructure would not change anything from the original agreement, including buyout rights that give Biostime the option to buy out the minority owners if certain milestones are met from 2018.
"Nothing has changed from the original arrangement, it's just we've got some debt in the business that financed the takeover of the business so any small changes in structure had to be washed out in some kind of a public format
"So no fundamental change to our original shareholdings."
(20min delay)