"Serving consumers with better products, reaching consumers with higher efficiency, and continuing to be optimistic about the Chinese market, Herbalife is rejuvenating."
Author: Insight Cat
This article is about 3200 words and is recommended for 6 minutes
Standing outside the enchanting rainforest of the business world, you can see a lush ecology in front of you.
However, when you recklessly break in and feel the mud, miasma, and ever-changing weather in the depths of the rainforest, you will discover a harsh reality:
The world is changing too fast! Today's splendid flowers will soon become tomorrow's yellow flowers.
For businesses, this means that the experiences and methods that used to survive have become dangerous in the blink of an eye.
In August 2021, PinCat launched the "2021 Direct Selling Industry Survival Status Survey", we hope to capture, explore, interpret the development and changes of enterprises, and summarize an evolutionary methodology for industry insiders from the perspective of industry observers.
Herbalife's performance in recent years has been surprising.
Let's start with a set of data.
Herbalife's global net sales of $5.54 billion in 2020 represented a 13.6% increase compared to the same period in 2019, setting a new record for best annual sales in history.
Herbalife's Q2 2021 net sales totaled $1.6 billion, up 15% from the same period last year and the largest quarterly net sales in Herbalife's history.
In the recently released Q3 earnings report, Herbalife Chairman and CEO John Agwunobi said that this year is still expected to usher in another record sales year.
In the industry survey of selling cats, many industry executives are very curious about Herbalife.
One of the industry executives told us: "Herbalife has achieved a contrarian upward trend due to its focus on a certain area, under the test of the epidemic. To be specialized in a certain field and to be able to speak with performance is the performance of 'strong'. "
Today we will talk about Herbalife's evolutionary methodology.
It involves Herbalife's supply chain layout, product innovation, digital upgrade and operation methods, and hopes to inspire you.
01. Deep ploughing supply chain
When you think of Herbalife, what comes to mind?
In the industry, the keyword "weight management" has been deeply integrated with the brand, firmly bound, and has become a typical label of Herbalife.
Born in 1980, Herbalife's first product was a protein blend, which opened up an expanding commercial footprint.
Only by having a supply chain can we have the right to speak.
Herbalife has long had a vision for the layout of the Chinese market.
In 1998, Herbalife decided to open its first factory in China in Suzhou to produce powdered and tablet products.
In 2012, Herbalife opened its first global raw material base in Changsha and sourced raw materials directly from reliable farms, integrating Herbalife's raw material supply chain.
In 2016, the Nanjing plant, positioned as Herbalife's flagship plant in China, was officially put into operation.
The establishment of these three production bases has enabled Herbalife to achieve localization at the product level, and it is understood that 95% of its products sold in China come from the production of local factories in China.
At the same time, Herbalife is also committed to localization innovation, increasing product research and development and innovation.
In 2020, in the Shanghai Zhangjiang Hi-Tech Park, Herbalife invested 160 million yuan to establish the "Herbalife China Product Innovation Center", which aims to quickly transform the most cutting-edge scientific and technological achievements in the field of nutrition science into nutritional and health products for listing, while strengthening local innovation and research and development capabilities.
Interior view of Herbalife's China Product Innovation Center
In 2020, Herbalife launched a record 18 new products throughout the year. Among them, the new product of the well-received milkshake "carry-on" shake beads in the market is the research result of this product innovation center.
Since the beginning of this year, Herbalife has launched a number of new products for the market, such as mango flavor protein nutrition shake (included), coconut flavor protein nutrition powder, Herbalife water-shaped tablets and so on.
In terms of product innovation, Guo Mu, president of Herbalife China and senior vice president of the world, said that Herbalife will continue to expand its product portfolio and introduce strategic new categories, from the dimensions of portability, deliciousness, and rigorous science, to continuously develop new products to meet the personalized needs of consumers.
02. Fly online and offline
The "product + service" model is the method that Herbalife has always adhered to.
Now, let's talk about Herbalife's service upgrade.
In the past, Herbalife's social commercialization was achieved through an offline model.
With 6,500 nutrition clubs across the country and operated by service providers, Herbalife provides one-on-one personalized service and spreads the concept of nutrition with consumer demand as the center.
For example, service providers will hold outdoor sports, climbing, jogging, making light food and other theme activities in the nutrition club to help users develop a healthy lifestyle, not just sell the product itself.
Herbalife attaches great importance to the training of marketers to improve their nutritional and health knowledge, so as to provide customers with post-counseling and consulting services.
In addition, Herbalife attaches great importance to dialogue with the younger generation, and holds "pop-up stores" activities in many cities to attract consumers to experience Herbalife China's high-quality nutritional products with rich interactive links, and fully feel the "nutrition + exercise = health" lifestyle advocated by Herbalife China.
Now, people's social circles have largely shifted from offline to online, and consumption habits have changed. Aware of this, Herbalife is revolutionizing the way it operates.
Against this backdrop, Herbalife is constantly exploring in the digital wave.
It is understood that Herbalife China has begun to test the digital business model in the early days, and relying on the "Herbalife Microservices", "Laishou" APP and Herbalife official website to order three channels, successfully transferred all transactions online a few years ago.
In 2019, Herbalife launched the digital transformation of its business in China, developing digital tools such as the "Herbalife Official Mall" based on the WeChat platform for marketers and the one-stop platform for service providers.
It should be clear that Herbalife's idea of digital transformation is not "broken", but to add on the basis of the offline operating model that has been operating for many years to achieve the effect of "1+1 is greater than 2".
Therefore, the purpose of digital transformation is to fully empower service providers and support service providers to understand customers more deeply, reach customers more widely, and serve customers more accurately.
03. Meet the trend of digitalization
Today's Herbalife has plugged in the wings of digitalization.
Herbalife's service providers not only understand the operation of offline nutrition clubs, but also use a series of digital tools to interact with customers on social media.
For example, the nutrition and fat-reducing meal punch card activities in the WeChat community and the help users place orders for products through the WeChat Mini Program Mall have greatly improved the efficiency of the service.
In particular, in September this year, Herbalife announced the completion of the business middle office deployment, which can build omni-channel, reusable solutions to support business innovation for a series of front-end applications including Herbalife's official store, App, website and so on.
After the business middle office is launched, the operator can launch richer and customized marketing activities to customers to achieve personalized communication and care with consumers.
The business middle office also supports the free decoration of the storefront, which meets the needs of different themes and different scenes; the middle office also introduces the ability of the inventory center to support the integration of national inventory.
Through the optimization of the functions of terminals such as WeChat Mini Programs, the middle platform helps service providers break through geographical restrictions and social bottlenecks and improve business performance with comprehensive business, social, content and data support, while supporting close, efficient and convenient customer management to further optimize the customer shopping experience.
Looking back now, Herbalife's digital transformation path is step by step, gradually deepening.
It includes the creation of hardware capabilities: in 2019, the "Herbalife Official Mall" based on the WeChat terminal was launched, and the business middle office was launched in 2021. According to the plan, Herbalife will also work with the world's top technology companies to create a data center.
In addition, Herbalife has taken the lead in establishing a digital office in China, and will continue to improve its digital capabilities by using the convenience of digital transformation in terms of culture, organizational capabilities, and business processes.
04. Conclusion
The core idea of Herbalife's evolution is to maintain the same frequency with consumers.
Continuous product innovation is based on the observation of consumer preferences.
As more and more young people set their sights on wellness and wellness, Herbalife's customer base is also showing a trend of rejuvenation. As a result, Herbalife continues to develop new customized products that are beautiful, stylish, convenient and delicious.
The continuous advancement of digitalization is based on the transformation of the way consumers socialize.
When consumers began to love online shopping, accustomed to interacting and consuming on social media, Herbalife launched a series of digital tools to empower service providers, improve the digital service capabilities of service providers, and let consumers enjoy convenience.
"We will continue to increase investment in China, starting from multiple dimensions such as rejuvenation, personalization and digitalization, to bring more high-quality, personalized nutritional products and a better consumer experience to Chinese consumers."
As Mr. Guo Mu said at the Fourth Ciie, Herbalife, which uses better products to serve consumers, reaches consumers with higher efficiency, and continues to be optimistic about the Chinese market, is rejuvenating.