Competitive Strengths

Our Directors believe that our competitive strengths are as follows:

(i) Established track record in the direct selling industry in Singapore
We are one of the pioneers in the direct selling industry in Singapore. Since our incorporation 13 years ago, we have established our track record as one of the key players in the direct selling industry. Our direct selling membership has grown from less than 1,000 members in 1990 to over 17,000 active members as at 31 December 2003. We consider active members as those who have purchased at least $500 worth of our products within a year.

With our experience and knowledge of the direct selling industry, we are able to continuously innovate and develop new brands and products to meet the changing needs of consumers. Since 1999, we have introduced contemporary brand names, such as "DR's Secret'' and "DRs Seager'' and rebranded our existing brands such as "bwL'' used in marketing and distributing our products.

Over the last three Financial years from FY2001 to FY2003, we have introduced 32 products. Leveraging on our established track record, we believe that we are well poised to expand our business in Singapore as well as venture into new markets.

(ii) Product focus with emphasis on high quality products
We focus on health and lifestyle products comprising 5 product categories, namely, cosmetics, skin care, nutritional supplements, personal care products and healthcare equipment. We currently have a range of over 100 products under these 5 product categories. In our continuing efforts to innovate and develop new products, we are focused on responding to the health and well being needs of our consumers.

We are committed to delivering high quality products at reasonable prices to our customers. For example, our Avance EPA 2000 fish oil supplement was recognised in 2003 and in May 2004 as the best selling fish oil in Singapore by Guardian's customers based on sales.

(iii) Experienced and committed management team
Our continued success is supported by our experienced and committed management team. We have a dedicated management team which spearheads our business operations and drives our growth plans. Their experiences and understanding of the industry in which we operate also enable our Group to develop new products and identify new business opportunities.

Our key management team comprises our Group Chief Executive Officer, Dr Dora Hoan, our Chairman, Dr Doreen Tan as well as our Executive Director, Huang Ban Chin. Dr Dora Hoan and Dr Doreen Tan each have over 25 years of experience in the industry and Huang Ban Chin has 14 years of experience in the industry. Our Directors are assisted by our Executive Officers, who have an average of about 10 years of experience each in the industry in which we operate.

(iv) Focus on brand management
We actively develop and manage our brands. In FY2003, approximately 96.1% of our revenue was derived from products marketed under our own brands. We outsource the manufacture of our products to contract manufacturers so that we can focus on management of our brands and at the same time, retain control over the quality of our products through careful monitoring of the performance of our contract manufacturers.

We have a dedicated in-house market communications team which works closely with our marketing team to establish the positioning of our brands based on the targeted market segment.

(v) Diversified distribution channels
When we were established in 1990, we were principally engaged in direct selling of cosmetics and nutritional supplements. As our business in the direct selling industry expanded, we recognised a need to diversify our distribution channels. Tapping on our packaging capabilities and established brand name, we extended our distribution channels into the export segment in 1993 and the retail segment in 1999. We currently distribute our products through 3 channels, namely, direct selling, retail and export which contributed 90.6%, 2.3% and 7.1% respectively of our revenue for FY2003. The diversification of our distribution channels enables us to lessen our dependency on any one particular distribution channel.

(vi) Large direct selling distributor network
We have a large network of distributors and we are able to leverage on their extensive network of contacts to further grow the demand for our products. We currently have over 17,000 active members in Singapore under our ENP. Our distributors can also expand their network overseas through our ISS. Additionally, unlike other direct selling companies which typically have one central distribution outlet, we have 4 business centres and a sales centre located strategically around Singapore for the convenience of our distributors.

Apart from serving as our sales centres, our business centres support our key distributors by providing training centres and offices to them. We believe that our commitment and support to our distributors has enabled us to build up a large direct selling distributor network. Over the last 3 financial years from FY2001 to FY2003, our membership base has increased by two-fold. In addition, we have 2 business centres in Malaysia with more than 6,000 active members under our ENP, distributing our products in the Malaysian market.