On May 9th,2011, Vinda’s CEO Donna Zhang talked about the company’s 6th Five-year plan, which targets at an annual growth rate of 25% for the company and writes down Vinda’s ambition to become Chinese consumers’ No.1 choice for hygiene products.
In 2010, Vinda recorded over 3.6 billion HKD of sales, with a production capacity of 370,000 tons. Donna Zhang said the Group aimed at achieving an annual growth rate of 25%, with a yearly production increase of 100,000 tons. Vinda was expected to have 700,000 tons of production capacity by the mid-term and improve its production network across the country. Bearing consumers’ need in mind working relentlessly to meet market demand, Vinda currently led the toilet rolls market and ranks 3rd in the tissue category.
The consumption per capita for tissue in China was still low, Donna Zhang pointed out. Vinda would closely follow the market trend and stick to its sustainability strategy in future.
China is the world’s second largest household paper market, only next to the U.S, and the fastest growing market. According to data provided by the China Papermaking Association, China’s household paper consumption grew from 680,000 tons in 1990 to 5.29 million tons in 2009, a growth of 600%. Consumption per capita in China, however, was remarkably less than that in developed countries. Toilet rolls accounted for 70% of total sales in the market, facial 8.8%, hanky 12.7%. But in foreign countries, this proportion was more balanced, with toilet rolls taking up 56% of the market and others 44%.
As the economy develops, income rises and people’s health awareness improves, China’s household paper market is expected to enjoy steady growth.
AC Nielsen’s data shows that in 2010, the market size for China’s household paper products was 50 billion RMB, with toilet rolls taking up 60% of the market. Another set of data suggests rapid growth for facial tissue in 2010, becoming the main driver for household paper business. Donna Zhang was confident in catching the trend in the market.
She agreed that under existing living condition, toilet paper would still dominate the Chinese consumption. But with improved living standards in future, the market would inevitably needed more diversified products to satisfy consumers’ demand. Vinda would address the niche market by leveraging its capability in market research.
Now Vinda operates in the household paper, away from home tissue and personal care businesses. Donna Zhang noted that Vinda adopted a segmented strategy to succeed in various markets.
Vinda first started with its household paper business and quickly won consumers with premium product quality. In 2011, Vinda collaborated with Dreamworks Studios to roll out the Kungfu Panda series. Vinda’s FEEL series was loved by OLs in the country. Donna predicted that market share for mid-high end toilet rolls would increase in the future and brought the largest growing opportunity for the company.
In away from home area, Vinda will strive to bring our products to more star hotels. Speaking of the growth rate, Donna was particularly optimistic. “With a annual premium hotel growth rate of over 10%, we anticipate at least 10% increase for our away from home business.”
Besides, Vinda is also exploring China’s personal care market, which has shown enormous business opportunities. At the end of 2010, Vinda invested 123 million HKD to found V-Care with Fu An International Limited and two other private equity firms. This company was built to develop personal care products. Although the company only owned the Babyfit brand for the moment, it was expected to expand to the incontinence and feminine market. Donna Zhang expected it to contribute 20% of the sales during the 6th Five-year plan.
By now, Vinda has built 7 production bases across the country. Donna said Vinda was strong in Central China, South China, HK and Beijing. In the future, the company would increase its presence in West and East China.
Sales channels are also central to the company’s success. Vinda has established long-term and close relationship with over 850 quality distributors and continued to expand its sales network into rural areas. The company is also testing the feasibility of selling its products on e-commerce platforms.
Vinda is committed to giving back to society. Sustainability always sits at the heart in the company’s production management.
With a thorough 6th Five-year plan, Vinda believes it will continue to lead the market and become consumer No.1 choice for hygiene products.