By-Health Faces Challenges After Thirteen Years of Growth: Revenue and Profit Down in 2024

Over the past thirteen years, By-Health has maintained stable and rapid growth, consistently ranking among the most profitable health supplement companies. It leads the industry in scale, profit margins, and market share. However, in 2024, the company faced unprecedented challenges, with both revenue and net profit showing significant declines.

Founded in 1995, By-Health introduced dietary supplements (VDS) to China in 2002 and successfully listed in 2010. Benefiting from its early investment in non-direct sales channels and leveraging the growth of chain pharmacies, the company transitioned successfully into the online market. Since its IPO, By-Health’s revenue has grown from ¥346 million to ¥9.407 billion in 2023, achieving a nearly 30% annual compound growth rate, making it the domestic market leader.

However, in 2024, amid a consumer downturn, By-Health issued cautious forecasts, predicting only single-digit revenue growth. Unfortunately, the reality proved more severe: its revenue for the first three quarters fell below ¥6 billion, with quarterly year-on-year declines of -14.87%, -20.93%, and -48.76%, respectively. Breaking ¥10 billion in revenue this year appears unattainable, and the company’s market outlook remains bleak for the coming years.

One major challenge is the lack of product competitiveness. Despite focusing on product innovation and branding, newly launched products underperform. Domestic sales of its three main brands — By-Health, Jianliduo, and Life-Space — experienced double-digit negative growth. The lack of product differentiation stems from limited R&D investment, which in 2023 accounted for less than 2% of revenue, far below the industry average.

By-Health also struggles with channel and marketing challenges. While its early success hinged on strong pharmacy channel layouts, its online sales underperformed, declining by 23% in the first three quarters and 31% in Q3. Efforts to expand online presence have yielded limited results.

High sales expenses further weigh on profitability. In the first half of 2023, By-Health’s sales expenses reached ¥3.859 billion, with a sales expense ratio exceeding 40%. Reducing the number of distributors has not translated into higher sales. The company is also still exploring new interest-based platforms and remains highly reliant on traditional e-commerce platforms, underperforming in emerging interest-based e-commerce channels.

Chairman Liang Yunchao highlighted that “product is the ultimate code for consumer brands, and marketing amplifies good products”. Yet, since Q4 2023, By-Health’s profitability has declined significantly, with each financial report further underscoring challenges in product strength and marketing strategy. Its stock price has fallen by 60% from its peak in 2021, reflecting market concerns over its future trajectory.

Facing market shifts and competitive pressures, By-Health must accelerate product iterations, adapt to changes in channels and marketing, and make strategic adjustments. While the company possesses a strong ability to learn and reflect, finding the right path to address current challenges will be critical to its future development.