Nestle Malaysia ties up with Lazada and 11street, targets RM500 million revenue

Nestle Malaysia has tied-up with online retailers Lazada and 11street to launch its wellness electronic stores on both their online shopping platforms. It is aiming to generate RM500 million in revenue from its e-commerce business within the next few years, said several media reports.

This was revealed by Nestle managing director Alois Hofbauer after the launch of its e-commerce stores in Malaysia and the company’s month-long e-commerce wellness campaign called “Wellness Together-Gather”.

Nestle Malaysia’s flagship e-commerce stores will offer nutrition products with discounts of up to 45%, equivalent to almost RM1 million worth of savings for the consumers. Hofbauer said that the company’s venture into e-commerce is important for its long term sustainability, adding it started the e-commerce business about a year ago, which is growing at a fast pace.

Hofbauer also said that Nestle is capitalising on e-commerce’s “convenience, accessibility and value” to spur revenue growth, according to The Edge Financial Daily. He also told the newspaper that the group will be investing about RM2 million to RM3 million into hardware.

However, a bigger chunk of the investment will be focused on the infrastructure, new resources and working with professional e-retailers.

Going forward, Hofbauer was quoted saying that group not only wants to offer products, but also good services such as nutritional recipes, advice and healthy lifestyle tips for its consumers. He added that Nestle Malaysia is growing at a rate of 5% this year, beating the overall growth of 2% in the F&B industry.

Meanwhile the “Wellness Together-Gather” campaign is expected to run for four weeks in October, offering more than 260 products from 10 brands in Nestle Malaysia.

Earlier this year the food and beverage manufacturer attributed both its domestic and export businesses to the overall growth.  Hofbauer has also stated that the domestic business was driven by strong marketing activities and new product launches “which saw the group continue to strengthen its market share position in its key product categories.”

He added that innovation will be a key pillar in Nestle’s growth strategy going forward. For the six months ended 30 June 2016, Nestle reported a 31.3% growth in net profit to about RM409.5 million from a year ago, thanks to also higher domestic sales and a double-digit growth in its export segment.