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NZCTA Comvita Profile

Profile

NZCTA Comvita Profile

By Julie Chadwick, Communications Manager, Comvita New Zealand Limited

Enquiries to: Julie.Chadwick@comvita.com

Comvita is a publicly-listed, global natural health and beauty products company with a strong New Zealand heritage.

The Company was founded in 1974 by Claude Stratford at the age of 64, with a range of bee products he made and sold from his basement in his home in Paengaroa (Bay of Plenty). Now aged 101, Claude's values and the heritage of his commitment to product quality and purity is still the cornerstone of Comvita today.

Comvita develop and manufacture products in the categories of Health Care, Personal Care (Skincare and Wound Care) and Functional Foods (Health Foods). Selling into more than 18 countries, they are committed to the development of innovative natural health and wellbeing products, backed by credible scientific research.

Manuka (leptospermum) honey is at the core of the Comvita product range and they are the largest manufacturer and marketer of this uniquely New Zealand resource.

Nature and scale of the business in Asia

There are over 470 Comvita branded retail outlets (stand-alone stores and stores-in-stores) in Asia alone.

Asia accounts for over 30% of total group sales and has reached a level of complexity and scale for Comvita where it has now split into two regions – North East Asia incorporating Japan and Korea and Greater China and South East Asia.

Comvita’s focus is on building its distribution in China and working on maximising its retail networks efficiency in Hong Kong so these learning’s can be shared across the region.

China has developed into one of Comvita’s fastest growing markets, and it now has 400 branded outlets in more than 40 cities across the country. These include concept stores within high-end Chinese department stores and China Duty Free shops in all the major centres.

Comvita has been selling its high quality functional food and healthcare products in Hong Kong for almost 20 years. Over that time, Hong Kong has evolved into one of its largest markets and a launch pad for its fast-growing sales into mainland China and wider Asia.

Challenges

There were many challenges in the early years, from cultural misunderstandings to fundamental problems such as Greenlife staff not being able to speak much English and no-one at Comvita speaking Chinese. Some key relationships were built using translations from former Hong Kong residents living in Auckland who could also speak Chinese.

Launch pad into China

In 2004, Comvita also made a concerted effort to expand into Mainland China. It had started selling to the market some years earlier but sales had only been on a very small scale. Comvita identified the right partner to be their distributor – GP Enterprise, a sister company of China Duty Free, which provided good connections and distribution channels.

In 2007, Comvita acquired its long-time Hong Kong distribution partner, Greenlife Ltd, which was established in 1992 by Mr KC Butt. All of the key Greenlife staff remain with the company today. At the time, 90% of Greenlife’s product portfolio came from Comvita, and the company had an annual turnover of NZ$7.6 million.

Greenlife's proven track record, its distribution capability, retail stores, network of sales staff and in-store promoters, meant new products were able to be launched into the Asian market quickly and efficiently. The two companies were very aligned in their core values of health and wellbeing, and both pursued sustainable business practices and social responsibility.

Comvita’s Asian hub

Hong Kong became Comvita’s regional and logistical hub for Asia and the gateway to mainland China. Comvita’s staff travel virtually every day into China to meet with their distributor about day-to-day issues and to ensure they understand Comvita’s strategy.

Support from New Zealand

Comvita wants consumers to have the same shopping experience wherever they buy at their branded stores around the world. Keeping the same look, feel and service level among all the 400 stores in China is a real challenge. Comvita has invested in both standard retail and design systems and has invested in global training resources to support its Asian retail operations.

Finding the right partner

Comvita’s presence in Hong Kong and its acquisition of the Greenlife Hong Kong business was a key part of the strategy to support China and the wider Asian region.

Finding the right partner is key to success in Hong Kong and China. Being a successful business in Hong Kong allowed Comvita to work closely with the Chinese market and in the end choose the right partner to do business with in China.

There are a number of ways to operate – joint ventures, distributorship and so on. However, Comvita believes the most important thing is that you need to find someone who loves the brand as much as you do to represent your business.

It also takes a lot of time and effort to build the relationships with all of the key staff. Operating in China means an excellent relationship with your partner is essential, as this enables far easier navigation through any problems that may occur.

Understanding how to do business and build networks

Understanding the way the market operates and the local culture are also important. Comvita has worked with NZTE’s offices in the region, which provide relevant advice and a valuable second opinion. Comvita is also committed to building direct networks in-market with stakeholders such as China CIQ (China Inspection and Quarantine) who are important to deal with when importing products into that market. Without these key networks it is very difficult to build a long term business in China.

Comvita is superbly placed to grow in Asia and in particular China, because of the vision of positioning Hong Kong as its Asian regional hub and the growth opportunities this presents to Comvita.

New Zealand on its own has a brand representing quality, innovation and integrity and Comvita’s premium brand is further enhanced by this. (NZX code: CVT)

For NZCTA members interested in publishing your company profile in our newsletters please contact Luke Qin, Executive Committee Member and Editor of China Now. luke.qin@nzcta.co.nz