In the third quarter, BYHEALTH experienced a significant decline in operating revenue, plummeting 48.76 percent to RMB¥1.12 billion (approximately US$157.67 million), a stark reflection of the tough market conditions facing the company.
The company acknowledged that the rollout of upgrades for two of its core products did not progress as swiftly as anticipated during Q3, which contributed significantly to the decrease in sales.
Moreover, 2024 marks the commencement of a new strategic roadmap for BYHEALTH, spanning three years, signaling a pivotal shift in the company’s operational focus.
This strategic plan aims to facilitate the development of innovative products grounded in scientifically validated nutrition, emphasizing consumer health value at its foundation.
“This year, as the consumption environment continues to evolve and competition within the industry intensifies, the company has set upgrading our operating quality as a core aim, concentrating on core brands, essential channels, and key categories, while also recalibrating the operational strategies and resources allocated to certain brands,” the company stated in a recent release.
“In Q3, the company’s push for upgrades for two of our core products was slower than planned. The above factors have brought greater pressure and effects to the company’s sales,” the firm added, highlighting the challenges it faced during this period.
BYHEALTH has also been actively investing in research and innovation, particularly in addressing common liver and skin concerns among women, while exploring the health benefits of water-soluble tomato concentrate for cardiovascular wellness.
Including the first two quarters, BYHEALTH’s operating revenue for the first nine months of 2024 contracted 26.33 percent to RMB¥5.73 billion (around US$806.95 million), while net profit saw a staggering decline of 54.31 percent to RMB¥868.61 million (roughly US$122.25 million).
The company has been witnessing lackluster performance since the beginning of this year, which is emblematic of broader challenges in the market.
In its half-year financial results, BYHEALTH reported an 18 percent decrease in revenue, attributing the decline to losses across its online, offline, and international business segments.
This trend has consistently weighed down the company’s offline revenue from January to September, which fell to RMB¥3.11 billion (approximately US$437.57 million), reflecting a decline of 29.08 percent.
While competitors like Haleon have seen gains in e-commerce sales, BYHEALTH has experienced a downturn, with e-commerce revenue plummeting 23.36 percent to RMB¥2.59 billion (about US$363.96 million).
Furthermore, a decline in revenue was noted across all of BYHEALTH’s primary product lines, indicating a widespread issue rather than isolated challenges.
Revenue from its protein powder brand, which shares the company name, fell by 29.20 percent in the first nine months of 2024, amounting to RMB¥3.19 billion (approximately US$449.53 million).
Similarly, revenue for the joint health supplement brand Keylid dropped 29.20 percent, totaling RMB¥698 million (around US$98.24 million).
The probiotic line, Life-Space, generated revenue of RMB¥271 million (approximately US$38.14 million) in the domestic market, marking a downturn of 29.55 percent.
On the international front, overseas revenues also witnessed a decline of 11.66 percent, bringing in RMB¥684 million (about US$96.27 million), underscoring the challenges faced in both domestic and global markets.
**Interview with BYHEALTH’s CEO on Recent Challenges and Future Strategy**
**Interviewer:** Thank you for joining us today. BYHEALTH has reported a significant decline in operating revenue in Q3, down nearly 49%. What do you attribute this decline to?
**CEO:** Thank you for having me. The decline in operating revenue is indeed concerning. Primarily, it stems from our slower-than-anticipated rollout of upgrades for two of our core products. This delay affected our sales significantly, especially in a market that is already challenging due to heightened competition and evolving consumer preferences.
**Interviewer:** Can you elaborate on how the company plans to address these challenges in the upcoming years?
**CEO:** Absolutely. We are kicking off a new three-year strategic roadmap in 2024, which is designed to realign our focus toward delivering innovative products that are scientifically validated. Our core aim will be to enhance our operational quality, concentrating on our essential brands, key distribution channels, and prioritized product categories. We believe this realignment will help us navigate the current hurdles and position us for sustainable growth.
**Interviewer:** With the changing market dynamics, what specific strategies will you implement to improve operational quality?
**CEO:** Our approach will involve recalibrating our operational strategies and reallocating resources to our most promising brands. We intend to leverage consumer health value as a foundation for our product development, ensuring that we meet the evolving needs of our customers. Additionally, we’re actively investing in research and innovation, particularly targeting common health concerns that affect our consumers, such as liver and skin issues.
**Interviewer:** That sounds promising, but what about the financial aspects? Can you provide insight into the company’s overall performance for the first nine months of 2024?
**CEO:** For the first nine months of 2024, our operating revenue contracted by approximately 26.33% to RMB¥5.73 billion. While these numbers are not what we hoped for, they reflect the necessity of our upcoming strategy and the challenges faced in the current market. Moving forward, we’re committed to turning these figures around with our renewed focus on product innovation and quality enhancement.
**Interviewer:** Thank you for your insights and for sharing BYHEALTH’s plans for the future. It will be interesting to see how your strategies unfold in the coming years.
**CEO:** Thank you for having me. We’re optimistic about our path forward and are dedicated to serving our customers better.
