[Direct Reporter Beijing, June 11] (Reporter Qin Chenyu) As a well-known old-fashioned American direct selling company, the development of Herbalife in China can be described as a matter of concern. After undergoing personnel changes, Herbalife adjusted its strategy in an attempt to reshape the brand image in China and revitalize the market performance in China.

 

Personnel changes

 

After Li Yanliang's departure, Herbalife once caused speculation in the industry. The reason that Li Yanliang was waived should be his disagreement with the United States headquarters. Earlier in June this year, Herbalife, based in Los Angeles, announced that Richard P. Goudis will formally replace Michael O. Johnson as chief executive officer. It is understood that Gu Lishi will guide the overall business strategy of Herbalife's 94 countries and regions, be responsible for strengthening the relationship between independent distributors and consumers, and continuously develop new product lines.

 

In the Chinese market, Herbalife announced the appointment of Dr. Zheng Qunyi as chairman of Herbalife Group (China). This appointment enabled Dr. Zheng Qunying to complete the transition from the president of Herbalife China to a new role, accelerating the company's development and leadership in the Chinese nutrition sector. On January 8, Guo Mu was appointed president of Herbalife China, and was solely responsible for the business development, strategic deployment, marketing and sales operations of Herbalife China market. Later, the media noticed that Herbalife's business in China has also been adjusted. Herbalife reduced 13 cosmetics and 1 health product. This large-scale reduction product is rare in the industry. A Herbalife insider believed that this was related to the strategic adjustment after Guo Mu took office.

 

Earlier this year, Herbalife released the fourth quarter 2017 performance forecast report, and China has become one of the fastest growing markets for Herbalife. The fourth-quarter performance of the Herbalife China market increased by as much as 9.6% year-on-year. Can Zheng Qunyi succeed Li Yanliang to continue this good momentum? Herbalife’s direct sellers expressed their confidence that if Zhengzhou’s headquarters were able to handle well-known issues and further strengthen cooperation with the Chinese government, Zheng Qunyi would be a good chairman and lead the Herbalife distributors in China to continue their advancement.

 

The new CEO of Herbalife, Gu Lishi, also expressed confidence in it. “Dr. Cheng’s expertise in nutrition and his strong confidence in Herbalife China make him a good fit for leading our Chinese team and taking it to a new level. Herbalife China is the fastest growing sales area and is also the global strategy of Herbalife. An indispensable part. We believe that under the leadership of Dr. Zheng Qunyi, Herbalife China will help more consumers to have a healthy and active lifestyle and achieve steady growth."

Rewind the machine

 

In the United States, Herbalife has also encountered "trouble."

 

In December 2012, hedge fund tycoon Bill Ackerman openly stated that he was short-selling Herbalife and he was throwing $1 billion; in February 2013, Akerman accused Herbal with irregularities. In July last year, Herbalife announced that it had reached a settlement with the U.S. Federal Trade Commission (FTC), paid a fine of 200 million U.S. dollars, and reorganized its U.S. operations to avoid being characterized as a laminated marketing (MLM) agency. The "gratitude" between him and Herbalife has also continued for five years.

 

In February this year Bill Ackerman told CNBC that on February 28th he had withdrawn from Herbalife's "bets." Five years ago he had a verbal quarrel over the company with Carl Icahn. Icahn said that he made a billion-dollar book profit in Herbalife's investment. With Bill Ackerman's withdrawal, this multi-year struggle ended, and Herbalife finally got rid of this "trouble in the body." And Herbalife is also thought to usher in a turn for the better.

 

The foreign research institute Citi said that investors can finally see the growth prospects of this nutritional supplement manufacturer's profits, rather than negative headlines. Citi Research raised its rating on Herbalife to neutral, arguing that the company's valuation is attractive to the market. "Even if the stock price rises, we see that with Herbalife's bidding and debt refinancing in 2019, both reinvesting the business and repurchasing stocks, we have seen signs of rising." Analyst Beth Beth Kite wrote in a report to clients. "We expect Ackerman's withdrawal may mean that with the dissipated overall risk, some investors will bring a new look to Herbalife. We think Herbalife should trade at a premium of more than 10% of the market."

 

After the market warmed up, Herbalife, the world's leading nutrition company, announced that the company will seek shareholder approval and formally change its name to Herbalife Nutrition. In order to reflect the ever-increasing leading position and expertise in the field of nutrition, Herbalife's change of name, focusing on the original basis, added and emphasized "nutrition" in order to create a global leader in the field of nutritional products. Herbalife Global CEO Gu Lishi said: “The new name will better reflect our common goal: to make the world healthier and happier. At the same time, it is more conducive to delivering our strategic and investment positioning as a nutrition industry leader. The company made this arrangement based on the strong momentum of our current global business. More importantly, we are confident that Herbalife will create a more brilliant future."

Increase investment in China

 

After experiencing a series of "changes", the Herbalife China market may have begun to realize the importance and problems of the Chinese market. On February 12 before the Spring Festival, Herbalife's headquarters released a message that it is good for the Chinese market, saying that it will establish for the first time a “Chinese influence and development investment fund” to stimulate its business in China and accelerate its growth in China. To help them cope with public policy issues that continue to pose challenges as obesity increases.

 

Herbalife announced that it has invested 600 million yuan to establish the first "China Impact Development Investment Fund." Under the background that the obesity rate is rising year after year, Herbalife will strive to meet the nutritional needs of Chinese consumers and help cultivate good nutritional habits. The decision to conduct this major investment in China has demonstrated Herbalife's emphasis on the Chinese market.

 

China is one of the fastest growing markets in the world and is also the core strategic market of Herbalife. According to Herbalife's fourth quarter 2017 performance report, Herbalife China's fourth-quarter results rose by 9.6% year-on-year. In the past five years, Herbalife China's revenue has grown at a compound annual growth rate of over 17%, with revenues exceeding US$3.5 billion. Since entering the Chinese market in 2005, Herbalife has been committed to meeting the nutritional needs of Chinese consumers and providing high-quality nutritional solutions. Herbalife will also continue to deepen the Chinese market, allowing more consumers to experience Herbalife's premium nutritional products.

 

After investing RMB 600 million at the beginning of the year to establish the "China's Impact Development Investment Plan," Herbalife has once again taken practical action to put emphasis on the Chinese market. A few days ago, Herbalife Global CEO Gu Lishi opened Sina Weibo and sent out his first interaction on a domestic social network.

 

Gu Lishi displayed a thick Chinese element on his first Weibo. Before a typical Chinese-style building, the president of a multinational company for more than one year was extraordinarily spirited and capable and fully demonstrated Herbalife's "Let's The goal of the world becoming healthier and happier.

 

"Our goals are also in line with some of the world's major trends - such as responding to increasing obesity, promoting healthy aging, coping with rising health costs, and providing business opportunities for entrepreneurs in today's society." Said, "In the process of accomplishing this goal, the Chinese market has played an important role in promoting."

Build a Millennium Plan

 

As more and more people grow up after the 1990s and even after the millennium, they gradually become the backbone of consumer spending on the market. How to seize the consumer groups of the younger generation has become a problem for the direct selling industry. This has also become a very important task facing Herbalife China. One of Herbalife's ‘four modernizations’ proposed was “young”.

 

Dr. Zheng Qunyi said: The main force of the society today is the millennial generation. Seizing the young generation will invigorate the development of Herbalife.

 

A few days ago, Herbalife's national brand flash shop started. It is a new marketing method established by Herbalife and Millennials. “The millennial generation is increasingly becoming the main force of consumption, and it is precisely because of the trend of actively adapting to the rejuvenation of consumption that Herbalife’s current business in China is booming,” said Dr. Zheng Qunyi, chairman of Herbalife China. “We passed the flash shop. Innovative marketing methods, such as training new generations of consumers on the brand's goodwill, will instill a younger image for the brand and further promote Herbalife's business development in China."

 

The theme of Herbalife's event is “Change, starting from a milkshake”, which integrates brand promotion and customer experience, and hopes to use flash store approach to open, interactive, trendy and interesting marketing with consumers. A new and stylish brand experience journey. The flash shop activities will sail from Nanjing and cover 12 cities in China, including Guangzhou, Chongqing, Xi’an, Beijing and Shanghai, which will last for nearly three months and are expected to receive over 2 million visitors.

 

Herbalife's flash shop focuses on the concept of "digitalization" and "individualization" and delivers the concept of "nutrition + exercise = health" to consumers. In the digital gym area, customers can experience the private customized gym in the smart age through various interactive interactive fitness forms. In the interactive projection area, Herbalife showcases the concept of “seed to table” quality management; customers can also Get real-time health data from a high-tech tester. It can be said that Herbalife's brand flash shop is a full-scale experience that allows young consumers to have a more intuitive experience and feelings about the Herbalife brand. This time, Herbalife adopts the flash shop model, which is the most popular marketing method for international brands nowadays. It refers to the creative design of the most eye-catching crowd in a crowded area, setting up brand shops with limited time and specific themes.

 

“We chose the first stop of the flash shop in the Nanjing factory. We hope not only to use the flash shop to allow more consumers to understand our products, but also hope to visit the transparent factory and let them understand the rigorous scientific research strength behind the product and 'seed to the table.' 'The concept of quality management enhances consumers' confidence in the Herbalife brand,' Dr. Cheng told reporters.