Herbalife takes Korea by storm

Users complain about side effects, high prices

By Kim Jae-won

Herbalife, a U.S.-based multinational health product company, is emerging as a dominant force in Korea through its direct marketing and good reputation.

But it also faces allegations of negative side effects and being a rip off.

Consumers say its high prices remains obstacles for further expansion.

The firm’s Shape Works Quick Start Program, designed to provide balanced nutrition instead of breakfast for one month, is sold at 237,500 won.

“I’ve heard that Herbalife products work well, but for me they are not affordable,” said a middle school teacher in Ilsan, Gyeonggi Province.

Some even complain of side effects, such as skin trouble, allergies and digestive problems.

“I suffered from side effects, such as a quickened heart rate and digestive problems,” posted a blogger on Naver.com, the nation’s biggest portal site.

Experts advise consumers to check which products are best suited to them and not to overly rely on them, saying users also need to exercise and keep a balanced diet.

Still, Herbalife is taking the Korean market by the storm.

“It is amazing. My daughter suffered from child obesity, but she got much better since taking powdered products from Herbalife,” said a nurse who declined to use her name for this story. She now sells Herbalife products.

The company dominates the local diet food market as its effect spreads through word-of-mouth marketing.

The company became the second-largest direct sales company in Korea only behind another U.S.-based firm, Amway.

Herbalife, established since 1980, is boastful of its nutrition, weight-management and personal care products, which are available exclusively through its more than 2.3 million independent distributors in more than 75 countries.

The company says scientific research is behind its success. “Herbalife is dedicated to developing innovative, effective products that comply with the highest research, development and manufacturing standards in the industry,” says the company on its website.

The firm reported record net sales of $3.5 billion in 2011, a 26 percent increase on 21 percent volume growth compared to the previous year.

For the same period, the company reported net income of $413.3 million, or $3.31 per share, reflecting an increase of 35 percent and 37 percent, respectively, compared to the 2010 results of $305.6 million and $2.42 per share.