Cellmid Limited (ASX:CDY) is focused on growing revenue, achieving profitability and brand development as part of its three-year growth strategy for FY2021-FY2023.
The company has identified several shifting value drivers in beauty, including many traditional brands losing market share online to independent brands with differentiated, personalised and relatable message and a noticeable shift to e-commerce.
Going forwards, the company has a renewed focus on branding and will promote product innovation by leveraging its expertise in hair and systems biology.
This includes:
- Maintaining leadership in hair biology through ongoing research and publications and new intellectual property;
- Growing the product portfolio, launching anti-ageing skincare range and supplements; and
- Launching the only first in class and/or best in class clinically validated anti-ageing products to retain its brand authenticity.
Shift to e-commerce
Cellmid is now focused on shifting to e-commerce with FY2020 online sales accounting for a greater proportion of total consumer health sales including own websites and online retail partners.
As part of this shift, the company plans to grow recurring revenue by increasing direct customers organically, through partnerships and targeted acquisitions, and growing geographic reach by:
- Building a customer database cost-effectively by utilising online B2B partnerships and affiliate programs;
- Maintaining portfolio of high-quality, efficacious and differentiated products to nurture customer trust and loyalty;
- Building direct relationships through social media, personalised messaging and value add content;
- Increasing brand awareness by engaging social influencers authentically; and
- Promoting a subscription service and auto-renewal for repeat sales by providing incentives and nurturing returning customers.
B2B partnerships
Cellmid has invested significantly in its own e-commerce infrastructure and digital marketing capabilities since 2017 while concurrently building distribution partnerships with online retailers.
This mixed model has been an important strategy to build the online business cost-effectively and the company now generates over 70% of US sales and 50% of Australian sales through online channels.
For the long-term, Cellmid will continue to nurture customers through B2B partnerships, from affiliate programs, and will continue to invest in customer retention strategies.
Cellmid is aiming for increased revenue from new geographies by FY2023.
New geographies and revenue
During FY2020, 20 new distribution channels were established and expanded across premium beauty retailers, pharmacies and television shopping channels in Australia, USA, Japan, Europe and Asia.
The company’s total revenue for FY2020 across these countries was $7.4 million
With the addition of revenue from China, Europe and the rest of Asia, the company hopes it will reach total FY2023 revenue of $22-25 million.
Distribution channels
New distribution plans include:
- Exploiting salon distribution in the USA - FY2021 onwards;
- Launching Amazon Europe and Amazon Australia - FY2021;
- Launching evolis T-mall store in China with Aeon and successfully execute on joint marketing strategy - FY2011 onwards;
- Exploiting Jo-Ju and Lexilis import permits in China with distribution partners - FY2021 onwards;
- Launching masstige range online and with major mass retailer partner in the US only - FY2022;
- Continuing existing growth trajectory in Europe – FY2021 onwards;
- Continuing existing growth trajectory in Australian salon and pharmacy channels - FY2021 onwards; and
- Launching locally manufactured evolis branded products in Korea for TV shopping – FY2022.
New products include:
- An anti-ageing skincare range launching in Australia and Japan in FY2022;
- A hair supplement launching in China, Japan, Australia and USA in FY2022; and
- A masstige product range launching in the US in FY2022.
Achieving profitability
Cellmid is progressing towards operational profitability, with the consumer health business expected to deliver further operational improvements in FY2021 with revenue growth in China, through online retailers, premium salons in the US and from expanded e-commerce in the USA and Australia.
The company plans to optimise the deployment of capital by:
- Investing in opportunities with strong cash-generating potential; and
- Implementing operational efficiencies through automated inventory, accounting and customer management systems.
To continue to improve supply chain, Cellmid will focus on more strategic ingredient sourcing to improve cost of goods and will transition to sustainable packaging including biodegradable or recyclable materials.
To take advantage of economies of scale, the company will continue to explore opportunities for large scale sourcing of ingredients and packaging and utilise multiple supply channels.