Business

Saturday May 2, 2009

Thalgo Cosmetic sees 30% growth in revenue

By SHANNEN WONG


FRENCH skincare brand Thalgo’s sole distributor in Malaysia, Thalgo Cosmetic (SEA) Sdn Bhd, is confident of “reasonable” revenue growth this year despite a shrinking market.

Executive director Tan Wei Ming says the overall cosmetics industry has seen a 20% to 25% fall in sales, with smaller players dropping out due to the higher operating cost amid the slowdown in business.

However, Thalgo Cosmetic continues to enjoy a reasonable growth in Malaysia, with year-on-year revenue advancing 30% in the first three months of 2009, he says.

Tan Wei Ming ... We believe pricing is no longer an issue with customer s

“We are confident of achieving a 30% growth in revenue year-on-year, supported by new launches,” he tells StarBizWeek.

Despite the weakening economy, Thalgo Cosmetic plans to go ahead with the launch of a whitening line next month, an organic range in October and a premium sister brand Terrake in the second half of the year.

“We are going to launch the organic range in a big way and we expect the new lines, especially the organic range, to contribute substantially to our revenue,” says Tan.

The French brand has been in Malaysia for over 30 years. Thalgo Cosmetic and its associate companies hold rights to three brands – Thalgo, Terrake and Skeyndor.

Terrake, the most luxurious spa brand in the world, was specifically designed for spas and targeted at hotel and spa owners.

“We will be talking to the same partners that Thalgo group is working with overseas,” says Tan.

Terrake’s flagship spa is located next to Louis Vuitton’s flagship store in Paris. It also has branches in Japan, China and Australia.

Thalgo Cosmetic plans to increase its advertising expenditure by 20% this year as it believes this is the time to get a stronger foothold in the market.

Asked if the premium price is a challenge for sales, Tan says: “We believe pricing is no longer an issue with customers; their main concern is the effectiveness of the brand and the value they get out of the brand.”

Thalgo Cosmetic’s products are priced from RM79 to RM700.

Regardless of the weakening economy, Tan says people would generally still continue to invest in personal grooming.

“It is especially during these times that people experiment less. They will stick to tried-and-tested brands that provide value and effectiveness instead of seasonal and fashionable brands,” he says.

This year, Thalgo Cosmetic will focus on markets outside the Klang Valley, targeting Johor, Penang and east Malaysia, where it recently opened two large dealerships in Kuching.

The company currently has 338 dealers, of whom 38 exclusively carry Thalgo brands. To enhance its partnership with the dealers, the company aims to cut the number to between 100 and 150 this year.

“Our role is to supply and assist our partners in marketing and advertising activities to ensure products are well distributed and within customers’ reach,” says Tan.

On another note, he says Thalgo Cosmetic hopes to consolidate its existing six companies under one holding company, Iyecon Sdn Bhd, by year-end.

“The consolidation is to accommodate our diversification into hotel consultancy works, distributor for other brands as well as event management,” he says, noting that all associate companies have the same shareholders and directors.

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