The Straits Times / The Business Times News on OSIM

Osim aims to replicate Asian success in the US now

ASIA has been good to Osim International. Will the United States follow suit?

For the first nine months of this year, group revenue for the healthcare and lifestyle products group jumped 51 per cent to $354.8 million, 90 per cent of which was accounted for by its Asian operations.

Revenues from its 302 outlets in North Asia totalled $213.8 million, up 30 per cent year-on-year. In South Asia, revenues generated from 235 outlets were 71 per cent higher at $105.4 million. All regions showed growth. Also helping was the consolidation of the results of Global Active, which Osim acquired earlier this year.

Nine-month net profit was $30.5 million, up 52 per cent. Helping the results were Q3's 49 per cent in net profit to $10.4 million and 79 per cent rise in revenue to $133.5 million. The question now is whether Osim's charismatic founder Ron Sim can create the same magic in the US.

Earlier this month, Osim, together with Temasek Capital and private equity firm JW Childs, completed the acquisition of Brookstone Inc, a US-based product development and specialty retailer for some US$450 million. With 292 outlets in the US, the acquisition would seem like a ready-made platform for Osim's popular massage chairs.

But speaking at Osim's Q3 results briefing yesterday, Mr Sim revealed that Brookstone already markets a massage chair made by competitor Panasonic which sells for about US$2,500. (Osim massage chairs sell for about S$5,000-6,000 with new top-end models costing S$10,000-15,000.)

Mr Sim also said that Brookstone has not managed to sell a significant number of units of Panasonic massage chairs and added that Brookstone still has to honour standing contracts with Panasonic although he did not say for how much longer.

On why the Panasonic massage chair has not sold in larger numbers, Mr Sim put it down to 'display and marketing'. Brookstone sells a wide range of products from pillows to poker tables but this looks set to change. 'The shop can be more specialised. And SKU (stock keeping unit) has to come down,' he said.

Success in the US will be important for Osim, not least because there have been a proliferation of Osim copycats in Asia.

Competition has become so stiff that Osim recently launched a new entry-level massage chair to do battle on the price-point front.

Starting at just $1,580, Osim's new Noro massage chairs are about half the price of its closest competitor. 'We are prepared for war and competition,' he said.

Eyes will now be on how Mr Sim works his magic in the United States.