BIO/PROFILE: Simon Cheng joined Healthy Life’s management team as its chief marketing officer in 2017, where he is responsible for repositioning Australia’s largest health retailer as the nation’s ‘most loved wellness destination’.
Before joining the Healthy Life team, Cheng held the role of vice president sales, marketing & PR at Carnival Australia, where he was responsible for driving the growth of two of Australia’s cruise lines, P&O Cruises and Cunard. During his time at both companies, the Australian cruise market experienced a staggering nine consecutive years of double digit growth and grew into a $5 billion industry.
Cheng has also held senior positions at Qantas Holidays, and global advertising agencies McCann Erickson and John Singleton’s, Singleton Ogilvy & Mather.
During his time at Carnival Australia, Simon was a member of the Tourism Advisory Board for Monash University. He is a current member of The Song Room Advisory Board, a not-for-profit organisation that develops music and arts programs for disadvantaged children to assist with learning and education engagement.
In February 2017, Allegro Funds and a management buy-in team acquired a majority control stake in Healthy life to partner with existing shareholder, Eu Yan Sang, a manufacturer, distributor and retailer of traditional Chinese medicine in Asia to grow the Healthy Life business.
Healthy Life is Australia’s leading health and wellness retailer with over 50 stores nationally. Stores offer a range of natural, organic, and eco-friendly goods, coupled with qualified health practitioners to provide expert advice in natural health solutions.
Inside Retail Weekly: Tell us a little bit about the last 12 months and how it’s been for the business.
Simon Cheng: Yes, business has been great actually. The business itself has been around for almost 60 years so it’s the longest standing retailer in this space and more recently in the last 18 months, it was acquired by new owners with a brand new management team joining, of which I’m one of them.
In joining, we’ve all come from different walks of life, wanting to get into the health industry and be part of something special.
Business has been good, we have been growing but we would like to be growing faster. We’ve managed to achieve a lot of really great things in the last 12 months and looking to do a lot more in the next year.
IRW: Has the trajectory of growth been really affected by trading conditions? Is the toughness of the market a little bit overblown?
SC: I think we’re probably fortunate in that we’re in a sector that has overwhelming growth – the complementary medicine or natural health sector is almost a $5 billion industry now and three years ago it was not even half that.
We’re fortunate to have been cushioned by this sector that’s had overwhelming growth, so a lot of demand, talk out there and hype about the industry.
We do feel it [market conditions] just like some of the other guys do. Christmas could have been better, but all in all, we are pretty happy with the last 12 months.
IRW: With the massive growth in that part of the industry, I might ask about the popularity of health foods and supplements in China. What are your thoughts on what’s propelling the popularity of Australian products in that market?
SC: I can tell you what I think about the market, but we’re not present in China at the moment, so we don’t really have much of a China strategy ourselves in the short-term. In the long-term, absolutely.
But the Chinese love anything that’s made in Australia and that’s really a testament to the great quality of product we have here.
The QC that’s involved in the production and manufacturing of all our products. Again, we’re fortunate to be in a market that is producing great quality, high-trending and popular goods to provide to a hugely billion dollar market.
IRW: Indeed, what are your general thoughts on the health food trends industry, are there any major ones that stick out in your mind, or any significantly impacting on Healthy Life’s strategies?
SC: Absolutely, one thing I’ve learnt in this business is that there’s a lot of your staples that will always be around. Grains, whole foods, I would daresay vegan is part of that now, because although it’s no longer a trend, we still talk about it in that manner.
Free-from products, dairy-free, gluten-free, all of those are staples now. So you have to do them well.
But equally, you have to be on top of all the next big things and we talk about the next big thing in our business because it’s important for two purposes.
One is to be on top to make sure we are providing it to customers and secondly, is actually to help explain what these new fads and trends are because currently there is no where in Australia, where people can go and ask those silly or dumb questions, ‘What the heck is this stuff?’.
People talk about it a lot and read about it in the media in top 10 lists, but there’s no one actually explaining what it is in layman’s terms and we see that as part of our role.
Some of the trends we’re seeing at the moment, obviously hemp. Hemp has always been popular but started to become a bit more mainstream since last year’s changes in the food laws.
So we’re seeing and have a lot more hemp suppliers in our business as well.
We’re seeing a lot of collagen. People are understanding the benefits of collagen products and collagen now being put into all different types of consumption devices or different types of food.
That seems to be a thing in this industry that when there is an ingredient, some type of superfood ingredient that’s caught on, it gets injected into absolutely every type of product.
Vegan products as I said are a staple but a trend as well. And we’re seeing a lot in the natural beauty space, as people become a lot more aware of what they put in their body.
Also, as people become more aware of what people put on their body, we’re seeing a lot more demand for toxin-free, artificial-free beauty products.
IRW: With some of these trends and the rise of fads, would you say that the digitisation of not only retail but the whole world has helped propel and give rise to people finding information faster than before?
SC: Of course. Digitisation and social media has impacted every single industry, more so industries that depend a lot on trends and for us it’s no different. We will be heavily investing in our social media strategy and our influencer strategy to make sure that we’re on trend just like everyone else.
IRW: Perhaps more broadly, what is Healthy Life’s approach to e-commerce?
SC: So our new e-commerce store only opened three weeks ago. Up until then, embarrassingly, we’re probably last in the market despite being around the longest.
But we now have an online store. It does have limited product at the moment but the plan over the next couple of months is to absolutely have every SKU, every product that we sell in our stores available on our online store.
The way we look at e-commerce is that consumers now have a lot more flexibility and choice in terms of where they get their information and transact and we just need to make sure that we’re readily available and accessible through all the channels that they prefer to purchase in.
That’s how we see it, it’s that whole buzz term around being omnichannel. People want to buy in-store, then they should be able to buy in a store. People want to transact online then we need to be present for that as well.
IRW: You mention the SKUS and trying to make sure that they are online and in-store, in this light, can you tell us about your relationship with suppliers or key suppliers, because obviously Healthy Life is all about quality products. Does this complicate the supply chain?
SC: We’re lucky that we have a really great team here, the buying team who work closely with our suppliers and really great experience from both in and outside the industry, but really great buying and retail merchandising experience.
For us it’s just a matter of making sure that we do all the right checks and balances with the suppliers that we work with.
We get a lot of approaches, as many retail businesses do, but we have a lot of approaches from different suppliers, different vendors that are claiming to be the next big thing.
We’ve just got to make sure that we have a systematic process for qualifying what the customers want. Everything we do has got to be all about what the customers want. So as long as it is something that we know the customers want and do the right checks and balances to ensure that it’s great quality and provided at an accessible price, then it’s a winner.
IRW: On the aspect of qualified expertise, I noticed that you have practitioners listed on your website and thought that was really interesting, in terms of providing a seamless in-store experience for customers. What makes service at a Healthy Life store special as oppose to a run-of-the-mill local pharmacy without having qualified expertise? I think that’s interesting given all the talk about the importance of customer experience in today’s marketplace…
SC: Absolutely, and you’ve just given the pitch yourself. That absolutely will remain our number one differentiator and is what sets this channel, the health channel, apart from everyone else.
In our business, four out of five of all our store staff are either qualified or studying to be a health practitioner of some sort, that is a naturopath, nutritionist or dietician or a herbalist etc.
And for us that’s hugely important because it’s a category where customers require a lot of assisted selling and advice.
A lot of our staff are actually valued members of the community in which they operate and this is where we want it to get to.
At the moment in Australia, the only place you can really go to have a health conversation is your doctor or pharmacy. Those are the two places people think of. Unfortunately that really only handles 5 per cent of health cases, it’s really when things are already wrong you go to those places right.
The rest of health cases are in preventative health and that’s where the health conversation really should be happening and there’s no one to talk to at the moment. We want to be the place where the health conversation does happen before it’s too late, before you have to go and see your doctor or a pharmacist.
IRW: What are Healthy Life’s expansion plans and abroad?
SC: Over the next couple of years we’ll be looking to open up more stores. We’ve got big plans to open a lot more of our stand alone stores, so the stores that you see like the Bondi Junction one we just refurbed. That’s one major growth channel.
And we are then looking to open a lot more store-in-stores, following on our store-in-store concept we launched at the end of last year. Our first store we opened in Wentworth Point within an IGA. We are basically the health food aisle within that IGA. So we’re looking to open a lot more of those and partner with a lot more other independent supermarkets to do that.
Then we’ve obviously just launched our e-commerce channel. Our third major channel for growth is the e-commerce channel, the online store where we can service parts of Australia then the world eventually where we don’t have a physical store presence. That’s been going quite well since we launched and we’ve had a lot of interest from parts of Australia that we normally wouldn’t service.
IRW: I’m sure the team’s excited about all of these initiatives on the cards…
SC: Absolutely. It’s a sleeping giant this business. Why we see this as such a big opportunity is currently we believe the health and wellness industry in Australia, it’s an overwhelming category for people.
There’s an overwhelming number of Australians who want to get healthier and a lot of them don’t know how to get there.
Health and wellness businesses traditionally have been positioned as quite inaccessible. A lot of that is driven by digitisation and social media, that is what the concept of perfect wellness should look like.
And we believe there is a role for someone out there, the role we believe we should play, in mainstreaming health and wellness, and making it more accessible to all those people who are actually looking to become a little bit more healthier.
The wellness industry is too often positioned as untouchable and creates an unattainable perception that if you can’t do this, then you may as well not bother and we believe that there’s a big role for someone to handhold people to bridge the gap between those people who are unhealthy and wanting to be healthy, eventually getting them to a point where they are where they can be in the healthy category.
IRW: I think of visits to GPs that might not understand a new health option and get you out the door as fast as you entered…
SC: Exactly. Often those kind of people are almost intimidated to even learn about natural health because they’re positioned as this thing for hippies.
People refer to it as an alternative lifestyle and it’s not. It’s a complementary health industry and we’re about helping people live for everyday wellness and just that little bit healthier.