Fiercer competition in the Thai ready-to-drink green tea market has sharply hit SET-listed Ichitan Group Plc's (ICHI) revenue and net profit in the first half of this year.
The company's first-half revenue plummeted 19% year-on-year to 3.18 billion baht while its net profit dropped 39% to 392 million baht.
Tan Passakornnatee, Ichitan's chief executive, said the ready-to-drink green tea market is very competitive because there is a big range of choice for the consumers.
The intense competition stemmed not only from rivals engaging in aggressive price cuts to draw customers but also from other drinks companies introducing new alternative products.
Mr Tan said modifications made to enable the moulds to produce different sizes of green tea packaging had also hit production lines in the first half.
Ichitan's corporate market share was 41.2% in the first half, of which 27.3% belonged to Ichitan green tea and 31.9% Yen Yen herbal drink.
According to market research company Nielsen Co Thailand, the overall market for ready-to-drink tea in Thailand was valued 15.6 billion baht in the first half, with ready-to-drink green tea valued at 7.95 billion baht.
Mr Tan said sales has improved after Ichitan started Yen Yen at 10 baht for a 315cc pack.
To entice younger customers, Ichitan also launched Chew Chew fruit tea drink, which comes in grape and strawberry flavours. Feedback has been better than expected as there are only two other companies offering this kind of fruit tea. Ichitan plans to spend 100 million baht to promote the Chew Chew fruit tea next month.
Ichitan hopes to boost its sales in the rest of the year with new products, including Bireley's 100% fruit drink and Bireley's fruit-to-go next month. It may also stop selling the 290cc Ichitan green tea because its sales compete with those of the bigger size packaging.
Last year, the company's total revenue was 6.35 billion baht.
ICHI shares closed yesterday on the SET at 10.50 baht, down 30 satang, in trade worth 49.6 million baht.