Brand Health Check - Apr08

Helping the Osim brand stay healthy

Should Osim start communicating brand heritage to halt declining sales?

Osim has been a leader in the branded healthy lifestyle products category for the past twenty-five years and is set up as a brand management and niche marketing company, focusing on the consumer. As an IP (intellectual property) developer Osim has control over its brands, designs, technologies and concepts and over time has developed recognisable brands including more recent additions such as iSqueez, uZap and iGallop.

Positioned as an international lifestyle company, Osim's business strategy involves a focus on creating health, hygiene, nutrition and fitness products and openly communicates to consumers to take an integrated approach for a healthy lifestyle. The Osim network, which includes other brand names such as Brookstones and GNC, operates in Asia, Australia, Africa, the Middle East, the United Kingdom and North America.

The company's approach to marketing has tended to be very product-driven, so while the brand name is known, especially in Singapore, an emotional connection with consumers is sorely lacking. Celebrity endorsements of recently launched products such as iGallop, may have appealed to some, but has generally failed to inspire affection for the company's brand DNA.

This brand DNA, which is supposed to be about intelligent innovation, uncompromised integrity, a holistic well-being, and positive thinking, has yet to be communicated effectively to consumers.

Osim sales performances have been lagging of late, possibly an indication the company has stretched operations too thin (Osim has operations in more than 350 cities and close to 30 countries worldwide).

Our branding experts have their say on an Asian brand which has not been able to connect with consumers on an emotional level.

 

Diagnosis

Osim, one of the leader brands to have emerged from Singapore in the past decade, is going through a bit of rough patch lately. Its stock is at the lowest point since its IPO eight years ago. Chairman and founder Ron Sim admitted as much in a recent interview that the company has been "complacent". 

Osim seems to be battling on too many fronts at the same time. Does the company have sufficient resources to simultaneously manage multiple brands such as Brookstones in the US, GNC in Asia as well as its core Osim brand?

Despite strong economic growth in Asia the past year, Osim suffered revenue decline of 12% in South Asia and 26% in North Asia over the previous year. This is a signal of brand equity erosion.

Osim's array of new products such as the iGallop and uZap have helped to sustain consumer interest, with an ultra luxury version of its signature massage chair being introduced later this year.

Will this be sufficient to arrest the revenue decline?

Cure

• In addition to frequent new product introductions, Osim could enhance its premium positioning through substantially superior product design, quality and functionality. 
• Rethink massage chair product names targeted at businessmen.  The names should be more sophisticated than ‘uYoyo' and ‘uPaPa'.
• A sustained brand equity tracking study should be conducted on a regular basis to measure the effectiveness of the various brand building efforts and ensure Osim's long-term brand health.

Shauna Li Roolvink

CEO

BrandHub

 

Diagnosis

Osim has a continuous pipeline of new products, design innovations, and an expanding retail presence. So, with everyone seeking ways to promote their health and well-being, why are sales and profit flagging? The proliferation of fake products in China is clearly harmful, but there is a bigger issue for the brand. How can Osim avoid relegation to ‘gadget' status, a fate that drove down prices and drove many home exercise equipment makers out of business as the fitness trend matured in the 90s?

Osim has taken great pains to present itself as an international lifestyle company, through its high-tech products. But, the heritage of the brand is invisible. Also invisible is the design heritage that draws heavily on Asia both in terms of philosophy, and design. The net takeaway is a brand that is functionally advanced, but emotionally neutral.

Osim should learn from some of its successful neighbours, Eu Yan Sang and Singapore Airlines. Behind every great brand is a story that creates a mystique. Complement the products and technology with Osim's Asian philosophy of balance, well-being and harmony that is most certainly in their brand DNA, but is unexploited.

Cure

• Reposition the brand to balance technology and innovation with Asian heritage and philosophy, in a modern fashion.
• Expand service offerings linked to the Osim philosophy - services that support sales, after-sale service and that create new revenue streams. Study the Nespresso model.
• Change the funky-playful product naming conventions - it's cute, but does not support the product quality.
• Fight the fakes, but know this is not a cure for the ills.

 

Craig Briggs

Managing Director, Asia

Desgrippes Gobe Group