Australian supplements company Blackmores has reported its annual profit plunged 23.6 per cent to $53 million due to tighter e-commerce laws in China.
In January, China enforced changes to its e-commerce law to ensure sustainable development and to protect consumer rights, causing many consumers to shift towards local sellers.
China is Blackmores’ largest offshore market, but the vitamin maker told shareholders in February that it did not expect its sales in the country to grow over the following six months.
“We continue to see an ongoing evolution in the way Chinese consumers access our products, with a shift away from Australian retailers to more direct purchasing from e-commerce platforms in China,” the company said in a statement to the ASX on Thursday.
Blackmores expects the challenging trading conditions will continue during the first half of FY20.
Sales in China segment were down 15 per cent on the year prior, to $122 million. Blackmores reported “in-country business” is growing strongly with sales up 22 per cent during the year.
Full year revenue was up one per cent, to $610 million, but below expectations of $751.8 million.
The firm declared a final dividend of 70 Australian cents per share, down from 155 cents last year.
Last month, Alastair Symington was named as the company’s next chief executive and managing director, following a four month search. In the results update, the company revealed that Symington will join the company on September 16.
Blackmores remains the number one vitamin and dietary supplement brand in Australia with 15.9 per cent domestic market share.