OptiBiotix makes strong progress in e-commerce shift
By Josh White
Date: Wednesday 01 Nov 2023
(Sharecast News) - OptiBiotix Health reported significant progress in its commercial endeavours in an update on Wednesday, as it looked to attain profitability at the business unit level, ultimately leading to overall profitability.
The AIM-traded company said it was pursuing that goal through cost reduction measures, intensified engagement with existing partners, expansion into new partnerships in the US and Asia, and establishing a robust e-commerce presence.
Despite the challenging retail landscape, OptiBiotix said it had consistently experienced month-on-month sales growth with its existing partners.
Proactive account management was a key driver, increasing sales across major accounts.
Notable achievements included substantial sales growth with Apollo stores in India, with a remarkable 624% increase since the product's launch in September last year.
Apollo also reported an impressive 87% repeat purchase rate, with 27% of new customers opting for GoFigure products.
Similar sales growth trends were seen with Nahdi Medical pharmacies in Saudi Arabia, where sales had surged by 219% since their introduction in March.
Sales with other partners, such as Holland and Barrett and THG, were also on a positive trajectory.
In line with its strategic shift in 2023, OptiBiotix said it had expanded its partner base in the US and Asia to reduce dependence on a limited number of partners while tapping into markets with substantial sales potential.
Key achievements included securing a substantial initial order valued at £0.11m from a prominent US weight management and sports nutrition brand.
Additionally, partnerships with four new Asian entities for SlimBiome were expected to contribute around £0.15m in revenue for 2024.
International product listings with Costco and plans to introduce SlimBiome products to Boots online increased the company's growth potential.
OptiBiotix said discussions with a major US corporation for the introduction of its proprietary brand products and collaboration with a publicly listed sizeable pharmaceutical company in India were also underway.
In a strategic move towards e-commerce expansion, OptiBiotix appointed Shiraz Butt as r-commerce director in May.
The firm said it had aimed to transition from a B2B-focussed platform to a profitable e-commerce consumer health business.
That transition would encompass moving from ingredient sales to selling finished own-brand products and expanding the global online presence to enhance margins and reduce reliance on partners.
Notable achievements included website enhancements, expansion into various online channels, strong sales performance, and encouraging forecasts for gummy sales in China.
OptiBiotix said it was looking at continued investments in marketing, the exploration of new online sales avenues, and the introduction of innovative product lines as key drivers for further growth in the online consumer health business.
"We are making good progress with commercialising first generation products since the restructuring of the management team in March, with more active account management supporting existing partners returning to forecast, more focused commercial discussions leading to a significant number of new partners looking to use LeanBiome and Slimbiome, and growing online sales across multiple channels," said chief executive officer Stephen O'Hara.
"We are particularly pleased with the pipeline of high-quality partners and the high conversion rate of interest to new accounts and the progress we are making with online sales, particularly in China."
O'Hara said all of those opportunities had the potential to bring in significant future revenues.
"In addition to growing interest in our products the company has no debt, a strong balance sheet, second generation products close to commercialisation, and retains significant exposure to the considerable growth potential of the microbiome through its shareholdings in ProBiotix Health and SkinBioTherapeutics."
At 1110 BST, shares in SkinBioTherapeutics were up 3.41% at 28.44p.
Reporting by Josh White for Sharecast.com.
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