Localisation and distribution: Herbalife's co-president lifts the lid on firm's Indian success
The direct-selling firm recently reported net sales of US$294.5m in APAC — this represented an increase of 19.9% from US$245.6m in Q1 2018, as well as the largest proportion of Q1 2019 net sales among its global figure of US$1.2bn.
Co-president and chief health and nutrition officer, Dr John Agwunobi, highlighted India as a key growth market, saying, “Over the past few years, we have demonstrated exceptional growth in India.
“Since Q1 2016, India’s volume points have increased at a three-year compounded annual growth rate of approximately 35%, and compared to Q1 2018, India’s volume grew over 47% year-over-year.”
Accessibility for improved delivery
Agwunobi attributed Herbalife’s steady growth in India to several factors, including the company’s continued efforts to broaden its presence by adding product access points, such as pickup locations in more cities.
“The number of access points in India has increased to 742 in the first quarter of 2019, compared to 454 in Q1 2018. This includes third-party drop-off points, which have increased by over 75% in only one year to 651 in Q1 2019 from 368 in Q1 2018.”
Through this increase in product access, the company aims to ensure its products reach its distributors more quickly, thereby resulting in greater customer satisfaction.
Agwunobi said the firm will continue its focus on increasing the number of access points it has in Tier II and Tier III cities in India, so as to improve delivery timelines.
Market metrics
He added that the ‘underlying distributor metrics’ the firm had observed in the market have spurred its confidence that it will continue to see growth in India for the foreseeable future.
“The activity rate of sales leaders in Q1 2019 increased by 7% compared to the prior year to approximately 63% (this year), and our most recent annual supervisor retention rate was 61.7%, a record high and an improvement from 54.7% in the prior year.
“We have also continued to see steady growth in our ‘preferred customer’ segment in India, with over 52,000 new preferred customers in Q1, a record high and a 29% increase compared to the prior year.”
Products for the local palate
Herbalife’s success with localised products and flavours made for the Indian palate has also encouraged the firm to continue expanding its product line in the country.
In 2018, the firm introduced a new flavour of its popular Formula 1 Nutritional Shake Mix, a low-calorie, low-fat powdered formula derived from soy protein isolate designed to support weight management and muscle growth.
The new flavour, kulfi, was based on a traditional Indian frozen dairy dessert; according to Agwunobi, it exceeded sales expectations following its launch, and remains Herbalife’s second bestselling SKU in India.
Most recently, the firm launched a new probiotic product, Simply Probiotic, in India. A powdered product sold in sachet format, it can be added to beverages and is meant to promote the growth of beneficial bacteria in the intestines.
Agwunobi said, “It is specially formulated with a shelf-stable probiotic strain that can survive the acidic gastric passage to germinate in the intestines, not in the stomach like so many other common probiotics.”
Marketed as a ‘science-backed’ supplement that provides one billion active probiotic organisms to promote digestive health, Simply Probiotic is formulated with a CFU (colony-forming unit) GanedenBC30 probiotic, Bacillus coagulans GBI-30 6086.
The strain is provided by US firm Ganeden, and was chosen for its ability to not only aid in carbohydrate and protein digestion, but also remain stable when passing through the stomach.
According to an in vitro Herbalife study that used simulated gastrointestinal conditions, up to 70% of BC30 cells survive to effectively colonise the gut, and improve the gut bacteria profile by balancing the good and bad bacteria within.
It also contains no added flavours, colours, sugars or sweeteners, and is made with non-GM ingredients.
