Vitasoys huge investment in marketing is hard to resist the decline in performance, and its net income is down

 Vitasoys huge investment in marketing is hard to resist the decline in performance, and its net income is down

Specifically, Vitasoys revenue in mainland China in 2020 was 4.503 billion Hong Kong dollars, 4.628 billion Hong Kong dollars, 2.108 billion Hong Kong dollars, 2.264 billion Hong Kong dollars, 502 million Hong Kong dollars, 522 million Hong Kong dollars, 118 million Hong Kong dollars, 111 million Hong Kong dollars in Singapore.

It can be seen from the above data that the revenue of mainland China, Hong Kong, Australia and New Zealand all decreased year on year in 2020, while only Singapores performance increased year on year.

Novel coronavirus pneumonia has been a major concern for the company in its 2019-2020 financial year. It has experienced many events, including drought, forest fires, social events and new crown pneumonia epidemic, which has affected all the business market of the company.

? missed the rapid development period

??? the effect of huge capital marketing remains to be observed

It is worth noting that this year is the 80th anniversary of Vitasoy brand, but this year, the company also encountered a lot of troubles. At the beginning of the year, valiant varriors issued a short report, pointing out that Vitasoy was suspected of financial fraud, falsely reported profits in mainland China, continued to falsify accounts, fabricated growth myths and many other issues.

Although Vitasoy responded to the short selling crisis in the first time, there are still problems within the company. Some dealers pointed out that the lack of strict control over Vitasoys channels has led to confusion in the market price system, low market training costs, and internal high-level changes, which have gradually exacerbated the plight of Vitasoy. In addition, most small and medium-sized supermarkets in the north have vitamin lemon tea, but no vitamin milk.

In order to change the declining performance, Vitasoy also made some changes, and successively launched a variety of new soybean milk products, such as sugar free soybean milk and low sugar soybean milk, but the market reaction was flat.

In addition, Vitasoy also increased its brand marketing efforts. The company invested heavily in sponsoring variety shows and planning online marketing events. In the first half of the reporting period, the operating expenses were HK $1.855 billion, an increase of 8%. Among them, marketing, sales and distribution expenses reached HK $1.298 billion, an increase of 7%.

How effective is Vitasoys marketing promotion? The industry is not optimistic. Zhu danpeng said that the new generation likes the new and dislikes the old. Once the iteration speed of innovation and upgrading of enterprises slows down, they will be abandoned by consumers. After Vitasoy missed the opportunity of horse racing enclosure, the companys product innovation and upgrading did not take much action, which is a prominent problem restricting the companys development.

In Zhu danpengs view, the core problem of Vitasoy is that the company didnt take advantage of the trend during the hot development period to seize the market, thus missing the layout of the northern market and restricting the width of the whole market layout of the company. Due to the fact that the southern market has almost reached the ceiling, Vitasoy has only a chance to develop the northern market. If it only keeps the southern market, the company will spend a lot of display fees, promotion fees, publicity fees, personnel fees, etc., which will lead to a vicious circle.

However, Vitasoy is optimistic about its mainland business. In the financial statement, the company gives a forecast that it will gradually return to the growth track next year, and indicates that it is adjusting its investment pace to improve efficiency and productivity. In the competitive market, we will continue to focus on further consolidating the market leadership of soybean milk products, and strive for additional growth of tea product portfolio.

Source: Securities Daily Author: Xu Jie editor in charge: Wang Xiaowu_ NF