Background
Corporate profile
Penang-based Zhulian Corporation Bhd (Zhulian) and its group of companies are in the Multi-Level Marketing (MLM) business. The Group manufactures and distributes a wide range from products ranging from gold-plated fashion jewellery to health drinks and personal care products. Zhulian was listed on the Main Market (then known as the Main Board) of Bursa Malaysia on 27
April 2007.
Zhulian was founded in 1989 by Teoh Beng Seng, who believed there is a strong market for gold-plated fashion jewellery and brought the concept back to Malaysia from Europe. He chose direct selling as the distribution channel.
Business flourished and the Group started to manufacture its own fashion jewellery at its plant in Penang. In 1996, Zhulian began to diversify its offerings into other categories such as food and beverages (F&B), home care, personal care, health drinks etc. It has also successfully ventured abroad and currently has a strong presence in Thailand, Singapore and Indonesia.
Business
From fashion jewellery alone, Zhulian’s product offerings have since grown and it now offers a diversified range of consumer products as follows:-
Category Description
1. Fashion Jewellery
Over 2,000 designs of gold-plated, rhodium-plated and twotone jewellery items such as rings, pendants, brooches,earrings, anklets, bangles, bracelets etc, under the brand
2. Food & Beverage (F&B)
Premix coffee, cereal drink, juice concentrate and premix cocoa.
3. Nutritional Health
Nutritional supplements and drinks under brands such as Dr. Africana’s, Royalmix, B’Young, Vegi-Vera, Zhubee, Origrow, SS Solution, ISO.5, ISO.3, and ISO.7.Sugar substitutes under the brand Homsweet.
4.Home Care
Laundry, dishwashing and multi-purpose detergents as well as floor cleaner under the brand XTRA; and various air fresheners under the brand JUNGLE FRESH.
5. Personal Care
Personal hygiene products such as hair shampoo,conditioner, body shampoo, toothpaste, talcum powder,and foot care under the brands Smileon, Dolphin, Laviteen,Baby Cinta, Assaho, Hinokoshiwa and Eltina. Also, sanitary napkin under the brand Wanisa.
6.Beauty Care
Skin whitening, anti-ageing and body-shaping products under the brand Shishen. Lipsticks under the brand Nadra.
7. Home Tech
Water purification system known as Beyond Water. Air purifier system known as Beyond Microplasma Air Purifier.
8. Therapeutic
Bio-ion Therapeutic Mattress Pad, Scientific Pillow and Bolster under the brand of Contiago. Bio-magnetic therapeutic belt under the brand M-Belt.
Zhulian’s top three revenue generators – fashion jewellery, F&B and nutritional health – each contributed approximately 20% to Group revenue in FY10. Fashion jewellery had always been the anchor revenue contributor. Nevertheless, the F&B and nutritional health segments have been growing swiftly and by FY10, revenues from the respective F&B and nutritional health category overtook fashion jewellery.
As a MLM company, Zhulian’s products are distributed through its vast network of independent distributors and agencies located in Malaysia, Thailand, Indonesia and Singapore. Its distributor force in these four countries has grown from 365,000 in 2008 to approximately 540,000 presently. Its largest distributors force is in Thailand (~439,000), followed by Malaysia (~88,000), Indonesia (~12,000) and Singapore (~1,000). Thailand appears to be the fastest growing market for Zhulian, with the number of distributors rising from 250,000 in 2008 to the current 439,000. Meanwhile, we believe Malaysia is a mature market for the Group with a relatively steady force of distributors. Zhulian manufactures over 80% of its products in-house, and has three manufacturing plants in Penang Malaysia. In December 2009, the Group’s manufacturing facility that produces F&B and nutritional products achieved the Good Manufacturing Practice (GMP) certification, which provides customers further assurance that Zhulian’s products are manufactured in a hygienic manner and in accordance to the best practices in manufacturing. We understand the Group’s current production capacity is sufficient to support the expected growth over the next three years. Meanwhile, across the borders, Zhulian also has offices in Thailand, Indonesia and Singapore.
In terms of competition, the MLM landscape in Malaysia is competitive. According to the Ministry of Domestic Trade, Co-operatives and Consumerism website, there are 427 licensed MLM companies in Malaysia as at December 2008, being the latest available statistics. Nevertheless, wellknown and active MLM companies are a much smaller number. Publicly-listed MLM companies include Amway Holdings, DXN Holdings, Hai-O Enterprise, CNI Holdings, INS Bioscience and Caely Holdings while the better known privately-held MLM companies include Cosway, Elken, Neways Worldwide and Nu Skin (Malaysia) to name just a few. We note that most of the product offerings by these MLM companies revolve around F&B, nutritional, personal care, healthcare and household products.
While Zhulian also sells these items, its fashion jewellery offerings remain a differentiation factor from its competitors. The Group further differentiates itself by focusing on the Malay female segment, which makes up 90% of its customer base in Malaysia.
