(18-02-2019, 12:38 PM)MOV Wrote: [ -> ]https://www.businesstimes.com.sg/compani...ept-secret
Today drop 17% and trading halt.
Analyst and broking house just 'woke up' from their stupor and question franchise wholesale model? And many other question in the article.
Now called 'social selling', not direct selling?
IMO BW is long due for a correction as my own valuation of BW is less than the current price before the halt and also before the spectacular price surge.
Anyway, the discussion in this valuebuddies thread more than cover the concerns in the BT article.
Sharing my thoughts on the concerns of the article :
1. From the much touted high potential direct selling to franchise model
Direct selling involves a couple of risks(e.g. in previous BW annual global events, chinese high achievers mentioned the multi level
commission where it is not allowed in China but allowed in other countries. Given that it is a global event attended by people of different
countries and with a cross country business model, these chinese PD, AD, whatever D, cld be addressing their success stories to
the global audience in attendence. In fact, Nuskin also stated mispresentations/confusions by its members due to the different country
regulations as one of the risk in direct selling). Hence, IMO BW may have felt that franchise is a better(not perfect) solution.
2. Tracking sales (cannot find in Dazhong Dianping)
In fact, BW does not sell using the popular online channels like taobao, etc and instead their products are susceptible to counterfeit as
mentioned in one of the AGM(Mr Huang then said counterfeits are already found in the mkt). Buying at discounted member price then selling
on online channels defeats the purpose of its business model.
Instead, Wechat/sina/weibo provides user engagement(need to search using chinese e.g. 皙之密)
3. League Table Rankings and
Euromonitor
I suspect BW is using
Euromonito's data for the total monetary value of China' s premium skincare market, and based on their sales/revenue
data, determine their own table ranking.
Pls note the above are from my knowledge and pls feel free to correct my understanding. Do wait for the official BW answers.
DODD.
On a side note, I do prefer if the BT reporter provides more in-depth questioning like our VB thread instead !