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Blue Power aims to e-tail soaps to US to grow sales
TANNA... we are crossing our fingers.
Business
BY STEVEN JACKSON Business reporter jacksons@jamaicaobserver.com  
September 22, 2015

Blue Power aims to e-tail soaps to US to grow sales

Blue Power Group plans to sell soaps on its website and through third-party traders who will tap into online platforms eBay and Amazon.

It is aimed at targeting Blue Power’s growing US following which the company monitors on social blogs. It’s also geared at hiking annual sales which remain flat at $1 billion.

“We don’t have a site in which the soaps can be purchased online and that’s something that we are investing in,” said chairman Dhiru Tanna in response to a query at the annual general meeting held last week in Kingston.

The company plans to link with at least one US-based trader who will fulfil orders online. Blue Power recently partnered with US distributor Iberia Foods Corp to stock large and medium-sized supermarkets with its products. But that company isn’t designed to fulfil small household shipping orders.

“So the best way to do that is to have a distributor of smaller packages which people could purchase on Amazon or eBay and he ships them,” Tanna said adding that fulfilment by Amazon and eBay remains costly which makes the trader’s proposition more attractive. “So we are now talking with a person from the US and he has a website with 10,000 customers that buy from him. He will buy like 20 or 30 cases and make smaller packages and ship them by UPS.”

Regarding the local market, the group hopes that its strategy of buying its way into supermarket shelves and spending some $8 million between January and April on advertising will increase sales in the short to medium term.

“We are crossing our fingers,” he said.

The company previously announced that it would sell its soaps in the MegaMart shopping chain exposing its products to a whole new retail market beyond wholesalers and handcart vendors. Tanna indicated at the annual general meeting that supermarket space still remains costly to acquire.

“We are paying the supermarkets and continue to pay the supermarkets for this shelf space and it doesn’t come cheap,” he said explaining the logic behind the increased expenditure. “The idea that we will increase our sales with all the displays, promotion and everything we are doing. [We expect] people to pick them up from the shelves and we will have a continuous source of sales….You are never sure if it will happen but you have to spend the money to find out.”

The company posted $18.6 million in net profit after tax on $301 million in revenue for its July first-quarter 2015 or one-third lower profit than a year earlier. The company’s profit is hurt by cheaper imports into Jamaica and reduced disposable income from key consumers. Quarterly sales actually grew 8.6 per cent over year-earlier levels but annual sales remain flat at $1 billion for two consecutive years.

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