2019 was a year filled with challenges but also with opportunities to Vinda. Against the backdrop of a complex, ever-changing international landscape shaped primarily by the lingering Sino-US trade tensions, a slowdown in economic growth of China and fluctuation in Renminbi exchange rate that led to an intensified downward pressure on China economy, the Group nonetheless delivered encouraging results in 2019 and achieved sustainable revenue and profit growth by virtue of our long-standing commitment towards innovation and the well-established branding effect built over the years, making significant progress towards our vision of becoming the most preferred brand of household hygiene products and services in Asia.
China is one of the largest household paper markets in the globe. From the perspective of the consumption of household paper, the annual per capita consumption of household paper nationwide, as driven by the growth in the per capita GDP in China has been rising steadily year by year while several folds of improvement could be achieved as compared to other developed countries of the West. Vinda always stayed focused on the development of household paper products, whilst the personal care segment would be another focus development. It was widely known that the massive demand personal care market in China brought business opportunities to the quality incontinence care product market as a consequence of an aging population in the country. The Group was confident in reproducing the proven business model of our personal care segment in mainland China as underpinned by the dazzling performance of the personal care segment of Vinda in Southeast Asia. In view of this, the Group succeeded in increasing the domestic production capacity of feminine and incontinence care products during the year in order to cater for the Chinese consumers’ appetite and preference for the feminine and incontinence care products and expedite the understanding and responses to market demands, which would help to reduce production costs and well-equipped for the further development of the personal care segment.
During the year, the businesses in Southeast Asia achieved stellar performance. Buoyed by the advantages of the sales channels in Malaysia, the Group successfully entered the Malaysian market by introducing the range of Vinda’s high-end household paper products and maintained the growth momentum. With an aim to further strengthening the continuous growth in Southeast Asia, the Group set up its regional headquarters in Malaysia during the year, which will support product sales in over 25 markets in Southeast Asia when completed construction, reflecting the determination of the Group to expand its business in Southeast Asia and pursue the goal of becoming the leading hygiene products company in Asia.
As an enterprise with over three decades of flourishing operations, innovation has always been the core value of Vinda. The Group understands that the consumer market is highly dynamic and that only by persisting in product and technology innovation and keeping abreast of the times can an enterprise maintain sustainable development and gain trust and loyalty from the consumers. On the other hand, the Group devised strategies beforehand in the rapid reformation of sales channels which successfully seized market opportunities. According to the forecast of the Ministry of Industry and Information Technology of the People’s Republic of China, the sales volume of e-commerce in China in 2020 will reach RMB11 trillion. The Group took initiative as the first mover and formed an e-commerce team as early as in 2012 and attached importance to building long-term and sound cooperative relationships with various e-commerce platforms. Through leveraging on our pioneer edges and outstanding performance, it is expected that China e-commerce penetration rate will continue to rise and deliver satisfactory growth.
Looking forward to 2020, despite a variety of headwinds from uncertainties in the global environment, the fluctuation of Renminbi exchange rate and a potential rally in wood pulp price, Vinda always persists in boosting business growth with innovative products and endeavours in optimising product portfolio instead of taking part in pricing competition and focusing on quality rather than low price, which is in line with the consumption model transformation in China from fast-moving consumer goods to quality-orientated products and caters for the consumption upgrade trend. Vinda implemented diverse measures last year which laid a solid foundation for the future growth and competitiveness enhancement. Leveraging on our highly experienced and professional team and the long-standing support with the consumers and shareholders, Vinda believes that the defensive business of the Group will be able to turn challenges into opportunities in spite of any difficulties that lie ahead and maximise value for the shareholders.