It's difficult to walk through a mall in Asia without encountering an Osim store. The ubiquitous Singapore-based healthy lifestyle company has been hugely successful in branding its products, not only in the region but throughout the world.
Since its founding in 1980 by Ron Sim, Osim has been one of the market leaders in niche health products. Its core product, massage chairs, has become a must-have luxury item among Asia's newly-affluent, who flock to the stores in droves to 'test drive' the latest model.
Osim has 560 outlets in 22 countries; and plans to build another 100 stores each year until it reaches 1,000 and a goal of S$1 billion (US$590 million) in sales in 2008. Ambitious plans to be sure, but the company has reason to be optimistic. Net profits in 2004 were up 32 per cent to a record $31.7 million; in Q4 alone, profits were up a staggering 61 per cent. The strong performance resulted in analysts such as Citibank Smith Barney and DBS Vickers upgrading Osim's stock. But is Osim getting too big? Earlier this year, it acquired Global Active, giving the company access to a network of General Nutrition Centers (GNC) across the region, and expanding its reach into the nutrition business.
Osim's latest foray is the US$456 million acquisition of United States retailer Brookstone. Leading a consortium that included JW Childs Associates (a Boston-based private equity firm) and Temasek Investment Holdings, Osim will have a 51 per cent stake in the retailer, which specialises in luxury electronic and niche products. The challenge for the company will be to stay true to its core brand while developing others and expanding its market reach. With copycat companies nipping at its heels, that's a tall order.
As Sim himself put it in an interview last month, "There are predators everywhere. And unless you're a few steps ahead of the copycats, you're dead in the market. You've got to keep running all the time." Will Osim be able to run fast enough?
