DKSH and Hwa Tai tie up to fuel growth via robust distribution ops

PETALING JAYA: DKSH Holdings (M) Bhd remains optimistic about its fast-moving consumer goods (FMCG) segment, expecting sustained growth driven by rising disposable income, digital transformation and increasing health awareness.

This positive outlook is bolstered by its recent collaboration with Hwa Tai Industries Bhd, with DKSH appointed as the authorised distributor of Hwa Tai’s LUXURY biscuits.

The agreement sees DKSH providing comprehensive market expansion services, including marketing, sales, distribution, logistics, as well as credit and collection services.

These efforts aim to ensure the products are readily available across various distribution channels, including modern trade, traditional trade and convenience stores.

“This collaboration reflects our commitment to delivering growth through tailored solutions and robust distribution networks, particularly across Peninsular Malaysia and Sabah and Sarawak,” said Daniel Schwalb, vice-president of FMCG at DKSH Malaysia.

He told StarBiz that DKSH’s vast consumer data allowed the company to help Hwa Tai grow in an increasingly competitive market.

The partnership is straightforward, with DKSH purchasing Hwa Tai’s LUXURY products and managing the distribution, warehousing and marketing efforts.

Schwalb stated, “We are bringing to the table enhanced distribution opportunities while ensuring that the right marketing approach is executed.”

He further added, “If there is competition, the industry will keep innovating, which will be beneficial to consumers. There will be stronger differentiation between the players.”

Hwa Tai recently returned to profitability in the first half of 2024 after struggling in 2023. The collaboration with DKSH is viewed as a significant milestone for the company.

While challenges persist, particularly in promoting a premium product in a market with a rising cost of living, Ben Chung, Hwa Tai’s national sales manager, acknowledged, “We realise that the general prices of many goods and services are going up, and the cost of living is increasing. So this is probably the major challenge that we are facing as we attempt to promote our premium brand of healthy biscuits.”

To support this partnership, DKSH will implement both above-the-line and below-the-line advertising strategies, focusing on targeted marketing for premium consumers.

DKSH aims to increase distribution in premium supermarkets and drive sampling efforts through food service initiatives and eCommerce platforms.

DKSH is also expanding its presence in Sabah and Sarawak, where it recently opened a warehouse in Kuching.

Schwalb observed, “New marketing channels are emerging, supported by infrastructure improvements and the return of tourism in major cities like Kuching and Kota Kinabalu.”

He also noted, “With our neighbour Indonesia planning to resettle its capital in Kalimantan, we will see the contribution of Sabah and Sarawak to the total Malaysian growth story accelerate from here on.”