Chlitina Holding Limited
Chlitina Holding Limited
Group Introduction
1
Chlitina Holding Limited
CONTENTS
A. About CHLITINA
B. Market Environment in China
C. Core Competencies
1. A relatively large market
2. A comprehensive training system
3. Professional R&D and production mechanisms
4. A substantive brand concept
D. Financial Ratios
2
Chlitina Holding Limited
A. About CHLITINA
3
Chlitina Holding Limited
A.
About CHLITINA
Company Information
➲ Company Name: Chlitina Holding Limited
➲ Chairperson: Chen Pei-hua
➲ Paid-in capital: NT$757 million
➲ Total number of employees: 631
➲ Market segments:
R&D and
Production
Channel
Management
Skincare
Products
2012 Annual Sales Results
Sales Regions
Mainland
China
Other*
Total
Unit: Thousand RMB
Unit: Thousand NT
Dollars
%
505,087
2,365,825
98.23
9,123
42,734
1.77
514,210
2,408,559
100.00
*Note: Sales results in Hong Kong and Taiwan.
4
2013
A.
About CHLITINA
Company Milestones
2012
Number of
CHLITINA stores
Chlitina Holding Limited
Named "Most Valuable Beauty Institute" at China Beauty
Expo
"Most Influential Entrepreneurial Brand" award
Gold Medal, Joining China Franchise & China Venture
Exhibition
Top 10 Business Models, Business Model Summit for
Beauty Industry
Listed among China's Top 50 High-Growth Franchises
(Franchise 50) by ENTREPRENEUR magazine
Honored at the 17th China Beauty Expo as a "Leading Brand"
and "The Most Influential Beauty Chain Salon"
Listed among China's Top 50 High-Growth Franchises (Franchise 50)
by ENTREPRENEUR magazine
Named one of "Top 10 Most Investment Value Brand in Asia" at ASIA
BRAND ANNUAL MEETING 2012
2008
Formed an R&D alliance with a French partner;
CHLITINA saw the 15,000th person complete its elite skincare consultant
training program
1989
Launched the CHLITINA brand in
Taiwan
1997
3,000
Chlitina Group set up
operations in Shanghai,
officially expanding into the
Mainland China market
1999
2011
2003
Listed among China Famous
Trademarks
Obtained ISO 9001:2000
certification and
the GMP certification for
cosmetics manufacturers
Opened the first flagship
store in Shanghai
2,000
1989
1997
1999
2003
2005
2008
2011 2012 2013
Year
5
Chlitina Holding Limited
Product and Services
A.
About CHLITINA
Category
Product Type
At-home skincare
Liquid makeup
removers, cleansing
creams,
toners, lotions,
creams
Function
Cleansers
Hydrators
Treatments
Moisturizers
Protectors
Bio-regenerating collection
Eye treatment collection
Anti-wrinkle collection
Salon Products
Fairness (whitening) collection
Hydration collection
NATUREX collection
Skin treatment collection
Aromatherapy
Body
Essential oil (including blends)
Essential oil, lotion
Slimming collection
6
Chlitina Holding Limited
B. Market Environment in China
"China is a land of opportunities, and we
are in a season of harvest."
7
Chlitina Holding Limited
B.
Market Environment
in China
Size of China's Cosmetics Market
"Mainland China: a high-growth, competitive market
despite its relative immaturity"
Unit: 100 million RMB
3,000
Compound Annual Growth Rate
(CAGR): 8.12%
2,500
2,000
1,500
2,684
1,000
1,816
1,968
2011
2012
2,130
2,303
2013
2014
2,488
500
0
Source: Euromonitor
2015
2016
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Chlitina Holding Limited
B.
Mainland China Market for
Skincare Products, 2011-2016
Market Environment
in China
Face care
Hand care
銷售額（人民幣億元）
Body care
1200
1000
800
600
400
200
0
Category/Year
2011
2012(F)
2011
2012(F)
2013(F)
2013(F)
Body care
27.32
29.31
31.41
Face care
695.93
769.65
849.97
Hand care
8.32
9.33
10.42
2014(F)
2015(F)
2016(F)
2014(F)
2015(F)
2016(F)
33.61
35.93
38.37
937.1 1,013.76 1,134.09
11.61
12.88
14.25
Source: Euromonitor（May 2012）
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Chlitina Holding Limited
B.
2011-2016年中國大陸臉部護理類產品市場
Market Environment
in China
Facial masks
Facial cleansers
Facial moisturizers
Lip care
Anti-aging
Toners
450
銷售額（人民幣億元）
Acne treatments
500
400
350
300
250
200
150
100
50
0
2011
2012(F)
2013(F)
2014(F)
2015(F)
2016(F)
Category/Year
2011 2012(F) 2013(F) 2014(F) 2015(F) 2016(F)
Acne treatments
5.37
5.74
6.12
6.51
6.91
7.32
Facial masks
58.62
66.95
76.26 86.63 98.14 110.89
Facial cleansers
80.64
84.33
88.01 91.71
95.4
99.06
Facial moisturizers 301.96 329.99 359.88 391.63 425.62 461.65
Lip care
4.74
5.11
5.5
5.9
6.31
6.75
Anti-aging products 199.62 226.01 255.35 287.71 323.26 362.19
Toners
44.98
51.52
58.85 67.01 76.12
86.23
%
0.65%
9.78%
8.73%
40.71%
0.60%
31.94%
7.60%
Source: Euromonitor（May 2012）
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Chlitina Holding Limited
B.
Market Environment
in China
Analysis of China's Beauty & Recreation
Industry
"China's beauty & recreation services are mostly
delivered by independent businesses, without any
differentiated industry leaders."
Western Countries
Mainland China
Chain stores 3%
Independent
stores
52%
Chain
stores
48%
A whopping 45%
difference in
growth rate!
Independent stores
97%
Source: Annual Survey of Aesthetic, Recreation and Wellness Chains, China Chain Store & Franchise Association
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Chlitina Holding Limited
B.
Market Environment
in China
Beauty & Recreation Service Providers
Worldwide Rely on the "Chain/Franchising"
Business Model for Survival
"Economies of scale is key to success for chains and franchises."
Only 10% of new stores survive!
Franchise beauty brands
Approx. 9,000 stores (3%)
Lack of branding
leads to isolation
Industry regulatory
measures
are inefficient
Some services
providers
are unqualified
Competition in the
market
is not properly
regulated
Non-franchise beauty brands
291,000 stores (97%)
Franchising leads to successful brand expansion!
Survival among new stores increases
to 90%
Franchise beauty brands (Mainland China)
Non-franchise beauty salons (Mainland China)
Source:
Annual Survey of Aesthetic, Recreation and Wellness Chains, China Chain Store & Franchise Association
2011-2015 Prospects of Operating a Beauty Chain in China or Making Related Investments, Beijing-based Zhi-Yan Scientific Information
Consulting Co. (www.abaogao.com)
12
Chlitina Holding Limited
B.
Market Environment
in China
Mainland China's Market for Skincare Products
Brand
Name
Business Model
Target Markets
Main
Products
Number
of
Stores
Listed
among
China
Famous
Trademarks?
(Y/N)
CHLITINA
A franchise
system
(Franchisees
must pay the
deposit and
franchise fee)
Mainland China,
Taiwan, Hong
Kong and
Southeast Asia
Skincare
products
Approx.
3,000
Yes
Natural
Beauty
A franchise
system
(Franchisees
must pay the
deposit and
franchise fee)
Mainland China,
Taiwan, Hong
Kong, Macau
and Southeast
Asia
Skincare
products
Approx.
1,500
Yes
AESTHETIC
A franchise
system
(A "no-franchisefee" policy during
promotional
period)
Mainland China
Skincare
products
Approx.
2,000
No
SIYANLI
A combination of
regular chains
and franchisees
(Franchisees
must pay a
franchise fee)
Mainland China
Skin and body
care products
BIO
JOURDEN
ESS
Mostly comprising
regular chain
stores
Mainland China,
Taiwan,
Malaysia and
Japan
Skincare and
makeup
products
Approx.
130
No
Approx.
800
No
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Chlitina Holding Limited
C. Core Competencies
"It's not the only option, but the most
competitive one."
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Chlitina Holding Limited
C.
Core Competence
TOTAL SOLUTION
A relatively
large market
Over 3,000 retail chains
Hundreds of stores join
the CHLITINA Group
each year
11 distribution centers
A comprehensive
training system
22 regional training
centers
Over 15,000
beauticians
Professional R&D
and production
mechanisms
A substantive brand
concept
Customized
products/treatments
China Famous
Trademark
GMP-certified
manufacturing facilities
Enlightenment
Educational Program
A technological R&D
alliance with a French
company
CSR efforts
15
Chlitina Holding Limited
C.
Core Competence
Market
Number of CHLITINA Stores in Mainland China
"China's largest professional beauty chain is taking shape."
Number of CHLITINA stores in China
A relatively large market
3500
3000
2500
2000
1500
2656
3004
3121
2012
2013Q3
2687
1000
500
0
2010
2011
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Chlitina Holding Limited
C.
Core Competence
CHLITINA's Locations across China
Heilongjiang
Province
32 locations
Xinjiang Uyghur
Autonomous Region
13 locations
Market
Jilin Province
29 locations
A relatively large market
Liaoning
Province
79 locations
Northeast China
North China
Inner Mongolia
Beijing City
Autonomous
202 locations
Tianjin City
Region
Ningxia Hui
76
locations
76 locations
Autonomous Region
Shanxi
6 locations
Hebei Province
Province
Shandong
70 locations
75 locations
Province
Gansu Province
90 locations
4 locations
Henan Province
Shaanxi 25 locations
Province
32 locations
Jiangsu
Anhui Province
Shanghai City
Province
105 locations
343 locations
343
locations
Sichuan Province
Hubei Province
79 locations
Chongqing City
171 locations
54 locations
Jiangxi
Zhejiang
Province
Province
Hunan Province
89 locations 525 locations
150 locations
Tibet
Autonomous
Region
7 locations
East China
Southeast China
Guizhou Province
40 locations
Northwest China
Southwest China
Taiwan
Fujian Province
58 locations
Yunnan Province
17 locations
 As of 2013Q3, CHLITINA has:
1) 2 regular chain stores and 3,121 franchisees in Mainland China
2) 126 distributors in Taiwan
Guangdong
Guangxi Zhuang
Province
Autonomous Region 301 locations
25 locations
Taiwan
126locations
Hainan Province
5 locations
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Chlitina Holding Limited
C.
Core Competence
Market
Presence of CHLITINA Franchisees in Urban Areas
"Rendering superior service in an ever-expanding
franchise network"
A relatively large market
Major
geographic
regions
Northeast
China
Southeast
China
2010
2011
2012
Sep 2013
31
32
34
32
76
71
72
76
North China
24
24
24
23
East China
124
128
139
146
9
9
13
15
44
46
47
41
308
310
329
333
Northwest
China
Southwest
China
Total
At least 700 cities in China have enough target customers to support
Chlitina stores—suggesting there is much room for further growth.
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Chlitina Holding Limited
C.
Core Competence
High-Quality Storefront and Interior Design
"A client-oriented, sophisticated service environment"
Market
A relatively large market
19
Chlitina Holding Limited
C.
Core Competence
TOTAL SOLUTION
A relatively large market
Over 3,000 retail chains
Hundreds of stores join
the CHLITINA Group
each year
11 distribution centers
A comprehensive
training system
22 regional training
centers
Over 15,000
beauticians
Professional R&D
and production mechanisms
A substantive brand
concept
Customized
products/treatments
China Famous
Trademark
GMP-certified
manufacturing facilities
Enlightenment
Educational Program
A technological R&D
alliance with a French
company
CSR efforts
20
Chlitina Holding Limited
25 Regional Training Centers
•Basic storefront management courses for new franchisees
•Basic/advanced product-related knowledge and ordinary skincare skills
•Advanced warehousing and market expansion capabilities
•High-level seminars on how to expand operations
•Knowledge about new products and skincare
Inner MongoliaBeijing
Dalian
Tianjin
Hebei
Shandong
Shaanxi
Chengdu
Hubei
A total of 15,000 well-trained elite beauty consultants currently
work at franchised CHLITINA salons nationwide
CHLITINA has provided nearly 300,000 trainees
with professional courses
CHLITINA aims to provide better services
while reducing employee turnover
Shanghai
Hangzhou
Chongqing
Accommodates up to 2,000 trainees
and is supported by a highly qualified teaching staff
Anhui
Nanjing
Suzhou
Ningbo
Wenzhou
Hunan
Jiangxi
Taipei
Fukien
Taichung
Guangzhou
Kaohsiung
Shenzhen
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Chlitina Holding Limited
C.
Core Competence
Comprehensive
A Three-Stage Training Mechanism for Elite
Aestheticians
"Nurturing well-rounded professionals with
comprehensive, career-long training solutions"
A comprehensive training system
Store Managers & Aesthetic Consultants
Senior Consultants
Corporate Culture
Business Administration
Consumer Psychology
Treatment Planning
Marketing
Instructor Training Programs
Skincare Consultants
Beauty Ambassadors
Corporate Culture
Occupational and Professional
Image Building
Skin Physiology
Skincare Consultancy
Skincare Techniques (advanced)
Product-related Knowledge
Beauticians
Basic Training
Corporate Culture
Skincare Techniques
(basic)
Customer Service
Etiquette
22
22
Chlitina Holding Limited
C.
Core Competence
Training Facilities
"A European-style beauty academy where all professional
training courses begin in the HEART"
Comprehensive
A comprehensive training system
23
Chlitina Holding Limited
C.
Core Competence
TOTAL SOLUTION
A relatively large market
Over 3,000 retail chains
Hundreds of stores join
the CHLITINA Group
each year
11 distribution centers
A comprehensive
training system
22 regional training
centers
Over 15,000
beauticians
Professional R&D and
production mechanisms
A substantive
brand concept
Customized
products/treatments
China Famous
Trademark
GMP-certified
manufacturing
facilities
Enlightenment
Educational Program
A technological R&D
alliance with a French
company
CSR efforts
24
Chlitina Holding Limited
C.
Core Competence
Guidelines for the Research and
Development of Diversified Products
Professional
Professional R&D and production mechanisms
Anti-aging and anti-sagging
Expertly rendered
All-purpose products with
salon-quality
results that last all day
skincare treatments
CHLITINA's technical alliance with a top-notch
fashion & beauty consultant from France
25
Chlitina Holding Limited
C.
Core Competence
Organization of CHLITINA's R&D Division
Department
Location
Department Roles
R&D Head Office
Training the R&D staff
Professional
Developing and introducing new technologies
Professional R&D and production mechanisms
Product R&D
Dept.
1st
Technology
R&D Dept.
Developing new products
Taiwan
Providing the Production Dept. and Quality Assurance Dept. with technical
support
Evaluating external labs and OEM manufacturers; Implementing
partnership projects
Verifying product safety, stability and efficacy
Managing confidential documents with regard to product formulation and
technologies
Finding and confirming material suppliers
Maintaining and confirming the legal compliance of products
Communicating and coordinating with the Shanghai-based R&D staff to
ensure technological consistency
Confirming product formulations/preparations and the legal compliance of
product information texts
2nd
Technology
R&D Dept.
Shanghai
Handling the conversion, editing, confirmation and output of product
information texts
Offering assistance in trial production and technology transfers
Handling the input and output of technology transfer documents
Finding suppliers of China-produced raw materials and conducting
experiments accordingly
Providing the Production Dept. and Quality Assurance Dept. with technical
support
R&D Center
France
Tracking the latest developments in global beauty/cosmetics technologies
and introducing them to CHLITINA
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Chlitina Holding Limited
Flagship Collections
C.
Core Competence
"More than 140 professional skincare products!"
Professional
Professional R&D and production mechanisms
E.P.O. Collection
This cellular
metabolism-booster
keeps skin cells
intact with an
adequate moisture
level despite
potential damage. It
seals in moisture to
effectively reduce
signs of aging,
symptoms of dryness
or chapped skin.
NATUREX toner collection
Pure plant extracts
of flowers, stems
and leaves are
formulated with a
high-concentration
serum to tackle skin
conditions caused
by excessive sebum
secretions,
sensitivity, aging,
(comedonal) acne,
skin damage,
dryness, spots or
dullness.
FANTASIA collection
ALIGHTS collection
The collection adds a
jade-like glow to the
face by hydrating,
revitalizing and
nourishing every skin
cell. It is a longlasting moisturizer
that keeps the skin
functioning properly,
while at the same
time giving it the
much-needed
revitalizing touch.
This terrific sun
screen collection
effectively shuts out
UVA/UVB rays. It
contains specially
formulated porous
powder to protect
skin without leaving
it greasy.
Etc…
27
Chlitina Holding Limited
C.
Core Competence
Certificates of Compliance with R&D and
Manufacturing Standards
Professional
Professional R&D and production mechanisms
28
Chlitina Holding Limited
C.
Core Competence
CHLITINA's Manufacturing Facilities
Professional
Professional R&D and production mechanisms
29
Chlitina Holding Limited
C.
Core Competence
TOTAL SOLUTION
A relatively large market
Over 3,000 retail chains
Hundreds of stores join
the CHLITINA Group
each year
11 distribution centers
A comprehensive
training system
22 regional training
centers
Over 15,000
beauticians
Professional R&D and
production mechanisms
A substantive
brand concept
Customized
products/treatments
China Famous
Trademark
GMP-certified
manufacturing
facilities
Enlightenment
Educational Program
A technological R&D
alliance with a French
company
CSR efforts
30
Chlitina Holding Limited
C.
Core Competence
China Famous Trademark
CHLITINA is an iconic business that achieved the highest honor for a brand
Substantive
A substantive brand concept
➲In a rare example, CHLITINA and Ke-Li-Ti-Na (the Chinese name of
CHLITINA) were simultaneously designated as China's Famous
Trademarks.
➲ "China Famous Trademark" is the highest-level trademark awarded by the
State Administration for Industry and Commerce of the People's
Republic of China.
➲ Only 14 Taiwan-based businesses have been awarded the Famous
Trademark designation.
➲ China's Famous Trademarks reflect excellence in terms of brand
awareness, reputation and customer services, as well as favorable
recognition from both authorities and consumers.
31
Chlitina Holding Limited
Branding and Product Promotion
2002-2009:
• Sponsored the advertising campaign for Shanghai International
Arts Festival in a successful brand positioning effort
2004:
• Sponsored Tsai Chin's concert "Under the Moon Light"
• Sponsored the 4th China Peking Opera Art Festival
• Started a year-round advertising campaign in SHANGHAI
TIMES for franchisee recruitment
2006:
• CHLITINA published a series of brand stories and new product
ads in VOGUE, MODERN WEEKLY and MINI
2007:
• Launched a prime-time advertising campaign on CCTV to raise
CHLITINA's brand awareness
• Sponsored "Her Village," a TV show hosted by Yang Lan
• Started a brand-awareness advertising campaign via Focus
Media
32
Chlitina Holding Limited
Branding and Product Promotion
2008:
• Sponsored the 11th Shanghai International Film Festival
• Started a year-round brand-awareness advertising
campaign in Hong Kong Daily News
• Started a year-round brand-awareness advertising
campaign via Focus Media
• Advertised new products in MODERN WEEKLY and
JESSICA
2009:
• Advertised the new FANTASIA collection in MODERN
WEEKLY
• Published franchisee recruitment ads for regional
franchise meetings
2011:
• Advertised new products in nearly 10 fashion magazines,
including Xinmin BELLA
• Chairperson Chen Pei-hua, CEO Richard Yu and VP Ye
Meifeng were interviewed by JESSICA, Top Golf, The
Week and many other fashion magazines
• Launched outdoor advertising campaigns in multiple
places nationwide to enhance brand awareness
Chlitina Holding Limited
Branding and Product Promotion
2012:
• Chairperson Chen Bihua and CEO Richard Yu interviewed by leading
business and beauty industry media outlets, including Business Today,
Hers and GLOBAL FORTUNE
• CHLITINA's new products featured by Hers among other popular fashion
magazines
2013:
• Chairperson Chen Pei-hua and CEO Richard Yu interviewed by
numerous prominent Internet media outlets
CSR & Charitable Efforts
Chlitina Holding Limited
• Started a years-long campaign called "Project Hope"
for impoverished people and needy students
• 2004: CHLITINA Group contributed to Indonesian
Tsunami relief efforts
• 2004: Sponsored the CHLITINA Cup Bridge
Tournament
• 2004: Donated cash to Chongqing City for a
charitable drive
• May 2007: Sponsored the centenary celebration of
Tongji University
• 2008: Donated RMB 3.8 million to Sichuan
earthquake victims
• 2009: Started sponsoring the Enlightenment
Educational Program and Project Hope teacher
training programs
35
Chlitina Holding Limited
China Beauty Expo - Shanghai
C.
Core Competence
The Most Influential
Beauty Salon Chain
Leading Brand
Most Valuable
Beauty Institute
Substantive
A substantive brand concept
China Alliances Industry Association
Asia Brand Awards
Most Promising Chain
36
C.
Core Competence
Chlitina Holding Limited
Hers magazine
ENTREPRENEUR
Women's Favorite Brand:
CHLITINA
2012 and 2013
Top 50 High-Growth Franchises (Franchise 50)
Substantive
A substantive brand concept
2013 China International Investment & Franchise Expo
The Most Influential
Entrepreneurial Brand award
Gold Medal, Joining China Franchise
& China Venture Exhibition
37
Chlitina Holding Limited
ASIA BRAND ANNUAL MEETING 2012
C.
Core Competence
Top 10 Highest Investment Value Brand in Asia
Substantive
A substantive brand concept
2013 Business Model Summit for Beauty Industry
Top 10 Business Models
38
Chlitina Holding Limited
D. Financial Ratios
39
Chlitina Holding Limited
CHLITINA's Operating Results
D.
Financial Ratios
In millions of NT Dollars
Net operating profit
1500
1200
900
600
300
0
177
2010
388
2011
In NT Dollars
791
2012
612
2013Q3
EPS (after tax)
15
12
9
6
8.84
3
0
1.72
2010
4.12
2011
2012
7.61
2013Q3
40
Chlitina Holding Limited
D.
An Industry with High Gross Profits
Financial Ratios
CHLITINA
L'OCCITANE
ESTEE LAUDER
Natural Beauty
82.71%
82.71%
80.10%
78.57%
Shiseido
KOSÉ
L’Oréal
76.11%
73.54%
70.67%
Source: 2012 annual reports
41
Chlitina Holding Limited
Net Profit
D.
Financial Ratios
30.00%
27.91%
24.51%
25.00%
20.00%
Chlitina
14.10%
15.00%
2012 Bio-tech profitable
11.42%
company in TW
10.00%
7.22%
5.00%
0.00%
2010
2011
2012
2013Q3
Source: CPA-audited annual pro-forma affiliation reports, released by the aforementioned
companies
42
Chlitina Holding Limited
Return on Equity (ROE)
D.
Financial Ratios
120.00%
100.00%
98.08%
90.09%
82.03%
80.00%
60.25%
Chlitina
60.00%
2012 Bio-tech profitable
company in TW
40.00%
20.00%
11.32%
0.00%
2010
2011
2012
2013Q3
Source: CPA-audited annual pro-forma affiliation reports, released by the aforementioned
companies
43
Chlitina Holding Limited
Return on Assets (ROA)
D.
Financial Ratios
40.00%
34.79%
35.00%
31.93%
30.00%
24.35%
25.00%
Chlitina
20.00%
2012 Bio-tech profitable
15.51%
company in TW
15.00%
11.91%
10.00%
5.00%
0.00%
2010
2011
2012
2013Q3
Source: CPA-audited annual pro-forma affiliation reports, released by the aforementioned
companies
44
Chlitina Holding Limited
Thanks For Your Attention
Q&A
45