|Background: Best World International commissioned PwC to do an independent review of the Franchise Model adopted by the Group in China in 2018. This is to obtain independent third party validation of the business model.
The scope of work to be performed by the Independent Reviewer was reviewed and approved by the Audit Committee and SGX RegCo, and will include, among other things:
• site visits to the business locations of the franchisees to verify their existence;
• validation of sales to significant franchisees;
• conducting targeted reviews on the sales and purchase records of the franchisees;
• reviewing the physical flow of inventory to franchisees;
• performing stock takes on inventory of franchisees on a sample basis;
• reviewing internal controls surrounding sales to franchisees and recommending improvements, where applicable; and
• reviewing compliance with the Listing Manual of the Main Board of the SGX-ST.
Update by Best World on 17 April: "The Independent Reviewer has made significant progress in its work since its appointment on 18 March 2019 and is expected to complete its work by June 2019. Based on the Independent Reviewer’s interim update as of 12 April 2019, the Board and the Audit Committee understand that the Independent Reviewer has not identified any matters that may have a material impact on the Group’s unaudited financial statements for the financial year ended 31 December 2018."
Follow-on: Best World said: "The Board believes that the objective of the Review would be better achieved if the annual general meeting of the Company for FY2018 is postponed until the Independent Reviewer completes the Review and the executive summary of its key findings have been announced on SGXNet. This would enable the Company’s shareholders to have more information on the Franchise Model and to clarify any questions that they may have at the AGM."
Web analytics - know where to look
On 3 April 2019, CLSA analyst Low Horng Han put out a report (sell rating and target price of $1.75): "We conducted a search on free-to-use Baidu Trends to assess consumer interest in Best World's products in China. The unavailability of trend results for Best World's company name and product name, in both English and Chinese characters, contrasts with that of Best World's direct-selling peers in China."
The analyst added: "On our WeChat search, the trend results for 'DR's Secret' were slightly better than Baidu but consistently lower than almost all the competitors."
To clarify the mattter, Best World then set up a new webpage of its corporate website. Its key point: "Online search is only one of several means that lead potential customers to purchase our products"
A key part of its digital outreach is through generating its own content on its WeChat page for its followers, and encouraging sharing of the content, for user engagement and brand loyalty.
Best World: Our Strategic Focus is User Engagement and Brand Loyalty
When we developed our digital marketing strategy in 2016, we knew that we had to differentiate ourselves in order to stand out in the highly competitive premium skin care market.
"We launched our first content in March 2017. Every week, we release new content for our followers, which encourages them to learn more about our products, to leave their comments and reviews, and to share the content."
Best World provided statistics on its bustling WeChat traffic: For each of the months of Dec 2018, Jan 2019 and Feb 2019, its WeChat page attracted about 100,000 views.
The majority, more than 80%, of the views came from its "pushed content" and sharing of the content by followers with others.
For more on its WeChat analytics, and to follow its WeChat page, see the Best World webpage