Sweet Taste of Success
28 May 2014
Ronnie Butt, General Manager, South Asia, Comvita HK
Hong Kong organic food industry pioneer and natural health devotee KC Butt discovered the health benefits of manuka honey while living in New Zealand nearly 20 years ago. He decided then that the product, derived from manuka flower nectar, which contains an antibacterial compound said to be effective for treating wounds and other ailments, would be welcomed by Asian consumers.
Mr Butt struck up a partnership with New Zealand company Comvita to distribute its manuka honey and other natural and organic products. Comvita has developed a wide range of health supplements, ranging from honey to specialist wound care and beauty creams.
In 1992, Mr Butt established Greenlife in Hong Kong and began to distribute Comvita products. It took time to educate the public about the health benefits of natural products, according to his son, Ronnie, General Manager, South Asia for Comvita HK Ltd.
“Initially, the main challenge was the lack of consumer understanding about health supplements in general,” Mr Butt says.
Selling to Consumers
New Zealand-based Comvita uses Hong Kong as a base to expand its Asian business
“Our health supplement business really took off in 2003 with the SARS outbreak, which really boosted the interest of Hong Kong consumers,” says Mr Butt.
Soon Comvita products were retailing in major pharmacy chains and premium supermarkets. Mr Butt promoted the product’s premium brand positioning to business customers, while developing a step-by-step, store-in-store concept, to tackle the consumer market. “The stores allowed us to capture the opportunity to engage with our target consumers on a daily basis,” the former engineer says.
“Transforming the business from B2B to B2C with limited resources was one of the biggest business challenges,” says Mr Butt. “It seems easy now with the Internet, but it was tough back then.”
Derived from the manuka flower nectar, manuka honey is said to contain
Establishing the first retail store in Hong Kong and the Chinese mainland, in Shenzhen in 2004, was a major milestone. Since then the company has built a network of Hong Kong retail outlets that sell to the local community, as well as to mainland tourists.
In 2007, Comvita acquired Greenlife. “We now have some 50 retail outlets in Hong Kong and 400 in China, as well as the necessary infrastructure to support the growth of the e-commerce business,” says Mr Butt. “This investment is in line with Comvita’s strategy of developing regional hubs to provide marketing and distribution capabilities in-market and enable expansion into neighbouring regions.”
Twelve of the Hong Kong outlets are stand-alone stores, as are 35 on the mainland and one of the 15 shops in Taiwan. “We will keep the existing number, as the e-commerce sector will be the primary driver of Comvita’s future growth,” he says.
Both the bricks-and-mortar and online outlets offer the full range of Comvita natural health products, which now include omega 3 capsules, propolis herbal elixir, toothpaste, manuka honey bars, antioxidants, apple cider vinegar, bee pollen, colostrum tablets and olive leaf extract.
Asia accounted for 44 per cent of Comvita’s receipts in the 2013 financial year, helping the company break the US$86 million milestone for the first time, with an eight per cent lift in sales, to US$89.25 million.
Continued strong demand in major Asian markets, including Hong Kong, the mainland and Taiwan, as well as in Japan and South Korea, has put Comvita on track to post similar figures this year, and for continuing growth in the region.
Hong Kong Showcase
Hong Kong, says Mr Butt, “is a great place to tap into an experienced workforce, and test and showcase our products to other Asian consumers.”
- Health & Beauty
- Hong Kong