One of Australia’s pioneering organic skincare companies has cracked the Chinese market – but it wasn’t an overnight success.
The international organic skincare market is estimated to grow to more than US$12 billion ($15.75 billion) within the next seven years but when Aromababy launched in 1994, it made barely a whisper.
“It was quite innovative and unique at the time,” Aromababy founder Catherine Cervasio told SmartCompany.
At the time, Cervasio says one in three children in Australia had eczema but the skincare products available offered poor choice to parents because they all used the same ingredients.
Get business news first
Sign up to SmartCompany’s daily newsletter
So she decided to create Aromababy, a natural organic skincare company offering research-based products for babies.
Her product range is now sold in hundreds of stores across the Asia Pacific and Aromababy is turning over under $5 million a year.
Cervasio expects this figure to triple as the company breaks new ground in China, a market she says requires dedicated focus and a long-term strategy.
“China’s not a market you want to do in addition to,” she says.
“Getting a solid base set up and products registered to sell in China is a rigorous, long and expensive process.”
What matters to investors in China
When presenting to Chinese investors, Cervasio found what was crucial to them was whether she had Aromababy’s intellectual property secured and the product registered in China to go on shelves.
“They were very impressed we had both,” she says.
Though businesses can export to China via e-commerce channels and through free trade zones, Cervasio believes those serious about breaking ground in this market need to take that extra step.
“Start the registration process and ensure you have your IP,” she says.
This includes securing a brand under different domains names, social media channels and handles in the market, which will be different to those that exist in Australia.
“You can’t afford to register one and not the other,” she says.
“Someone may have already secured it to knock you off.”
It took five years of flights back and forth, meetings, time and money for Cervasio to build Aromababy’s presence in China and to gain the trust of Chinese consumers as a foreign brand.
“We weren’t an overnight success in China,” she says.
Stand out from the crowd
With more than 16 million babies born in China each year, Cervasio says there is massive potential in the market for Australian retailers, particularly in health and wellness products.
But competition is tough.
“There are thousands of other brands marketing to consumers in their own language with existing rapport,” she says.
“What are you going to do to stand out?”
Aromababy has gained traction in the Chinese market not only because it has a point of difference but because the company actively build trust with stakeholders, Cervasio says.
“We’re not just a business selling a product,” she says.
“We care about the formulation, [and] educating health professionals and consumers about the benefits in general.”
Cervasio says her brand ws founded on a responsibility to protect its end user: babies.
She actively shares Aromababy’s research and evidence at various events and says building this trust is crucial in a market that is highly sensitive to things like product recalls.
“Make sure you have a clean track record, that you’re an expert in the field,” she says.
Early next month, Cervasio will join other influential businesswomen like Best & Less chief executive Holly Kramer in Melbourne to share practical advice on how she grew Aromababy into a multimillion-dollar business.
Speaking at the Australian Women’s Network Business Summit, she plans to divulge secrets on sustainable growth, exports and IP in the hopes of empowering others to follow suit.
“I left school at 15 and now I’m meeting with some of China’s wealthiest business people,” she says.
“I hope that I can really inspire women to believe in themselves, set amazing goals and just go for it.”