The international distribution market is changing and growing, offering success to distributors ready to adjust to the current global arena.
What are the most effective ways to handle the international distribution of pleasure products? Global marketing experts offer their input on success in this arena.
The availability of cash liquidity is vital in order to provide relevant, quality products along with updated packaging, an appropriate price point, and constant supply. -Michael Bassett, Lonbrook.com
According to Samir Saraiya, CEO of Digital E-Life and ThatsPersonal.com, India’s premium adult store, the Indian market is still relatively new. All the same Saraiya has exclusive distribution deals in place with 32 international brands. “For lubricants and sexual enhancement products, Pjur and System JO do well. When it comes to vibrators, Doc Johnson and CalExotics have been the clear leaders. More recently, one brand that has caught the imagination of our consumers has been We-Vibe.” Additionally Saraiya carries romance products such as DONA and Shunga. Consumers seeking a little edge can choose from the Fifty Shades of Grey products, which ThatsPersonal.com carries.
To establish a global brand, Saraiya says educating consumers is key. “India is a nascent but rapidly growing market for adult products. Categories like massagers, pleasure rings, and edible lingerie were unheard of before we launched in 2013. We use PR, social media and content distribution initiatives to build these categories, and make certain there’s adequate distribution, which leads to higher demand.”
Saraiya says it’s important to create a partnership with brands. “We need to make sure they’re interested in being in this market for the long haul, and invest the effort in helping us to grow the market,” he notes. “The goal is to make our categories and brands relevant to our customers. To do so, we make sure we distribute content, videos, and brochures to customers, and we share brand samples with the media to get effective product placement.” He expects the market to reach “critical mass in 2017,” and that the brands entering India’s marketplace today will achieve considerable market share without a great deal of marketing investment. “Brands that come in later will have to substantially spend on marketing and brand building to catch up,” he asserts.
To establish relationships with manufacturers, Saraiya attends fairs and exhibitions worldwide. His merchandising team members handle specific brands and categories, and his company engages brands through video calls, quarterly review meetings, and regular B2B emails to his partner brands.
As a business pioneer in India, Saraiya faces challenges relating to the interpretation of law and compliance requirements permitting the sale of adult products. “Along with the Indian Customs Regulations, this requires a lot of patience, perseverance, explanation and documentation to legally import these products for sale,” Saraiya explains. “To build this market, we are investing a lot of money in product education as most Indians are unaware of what these products are and why they should use them. Since sex is a huge taboo, making it easy to buy through private and discreet delivery is important as well.”
Overall, Saraiya describes the current state of the international market for pleasure products as steadily growing. “The e-commerce revolution has led to substantial growth, it’s a natural fit. And, the industry is slowly moving away from adult or erotic positioning to more of a sexual health and wellness position, with more distribution and retail channels, which helps to make consumers more savvy and aware about products in the sex toy industry.” He does see one downside in the current market, however. “We believe product innovation and differentiation is fairly limited, due to a lack of large-scale investment dollars, coupled with quick replication of products. And, traditional Chinese OEM and ODM manufacturers are trying to build their own brands, leading distributors are also building their own brands via private label manufacturers, so there’s increased competition. In order to go from niche to mass market, traditional FMCG companies like Unilever and P&G would need to build this category, similarly to the way Reckitt Benckiser is working with the Durex brand.”
In Victoria, Australia, Michael Bassett, managing director of Lonbrook.com describes the most popular international brands in the regions he serves as virtually any “good quality, established, lingerie or pleasure product brand that offers an updated and current range of items with current packaging, for example, brands such as We-Vibe, LELO, CalExotics, Pipedream, Doc Johnson, Bathmate, Pjur, Swiss Navy, System Jo, Rene Rofe and Seven til Midnight all do very well.”
To establish a global brand, Bassett believes certain points are key. “First of all, the availability of cash liquidity is vital in order to provide relevant, quality products along with updated packaging, an appropriate price point, and constant supply.” Promotion at global trade shows, the ability to review new items and discontinue poor sellers is also important, he says. “Creating attractive print and digital promotional materials including point of sale displays, is also necessary to establish a brand.”
As a distributor, Bassett notes that his main role is to make products and POS materials readily available for retailers at the local level, in the local currency. “Having product readily available allows the retailer to focus on sales activity, instead of allocating resources to import logistics such as two-month ocean freight lead times, duties, taxes and freight charges.” Bassett says distributors should also train and educate retailers on the product and actively assist them in growing their business. “And if the distributor understands their particular demographic and business niche, that’s a real bonus as well.”
Establishing relationships with manufacturers means personal visits to global trade shows and the manufacturers’ offices, Bassett explains. “After that, regular long distance communication keeps the relationship intact. At the end of the day, as a distributor, if you continue to pay the manufacturers’ invoices on time, and the business turnover with that brand is in line with their expectations, then usually the relationship will continue and prosper.”
As an international brand, Bassett finds it key to seek partners in specific territories to warehouse and distribute items at the local level in the local language and currency. As to the current state of the international market, Bassett says “There is currently more supply of brands and product than the demand can handle.” Like Saraiya, he is well aware that “Chinese factories are increasingly coming online and selling to retailers and consumers directly. Manufacturers are continuing to carve out key accounts.” With competition intense, margins are eroding. “Distributors must create their own branded lines in order to retain margin and preserve the sales channel. It’s life in the fast lane for all, but it’s a win for consumers,” he attests. “Consumers are eager to snap up online deals, and are better researched than ever. The brick and mortar retailer is slowly becoming extinct.” In short: “The adult pleasure product business like many other industries is in rapid evolution.”
Kate Hodgson-Egan, customer relations director for ABS holdings in the United Kingdom, says the company’s portfolio of international brands is always expanding. “We’ve got plenty of loyal brands that have been with us from the start, as well as exciting new brands that are causing a ripple in the industry. All the brands in our stable are important to us, and when we take on a new brand, we ensure that our sales staff is fully trained to provide the support for that brand to thrive.”
As far as establishing a global brand, Hodgson-Egan believes staff training and brand knowledge go a long way to ensure success. “We support our brands with website banners, magazine advertisements and editorial write-ups, as well as weekly newsletters, new product flyers and B2B catalogs. Our staff is always comfortable talking to our customers about new brands and products, and we offer training to ensure that our staff will be confident with the consumer,” she says. “What brands and products really need are support and passion to help them reach their full potential.”
To establish successful relationships with manufacturers, Hodgson-Egan says it’s all about “trust and communication. ABS has been in business for 40 years. The ABS team is a family and we treat our international manufacturers with the same respect that we treat our staff and customers. We’ve managed to build and maintain trusted partnerships with our key players through consistently excellent service.”
ABS has expanded its reach in the past several years. “We’re dealing with more mainstream clientele. Times are changing and it’s our responsibility to ensure that our customers keep up with changes in the market,” according to Hodgson-Egan. “I think the U.S. is a front-runner in this regard, implementing training, as well as incentives like giving away gifts with purchases. The U.K. and Europe are only just starting to see the benefits of introducing this mind set, but it’s exciting to see this kind of progression in the market.” She also feels that brands are becoming more consumer-focused, and that customers are more open to experimentation. “The popularity of brands like Fifty Shades of Grey have made sex toys less of a taboo. Customers are less coy about introducing toys to their partner, which is really great,” she adds. “Many brands that we deal with are now also more safety conscious, and body-safe materials make the use of sex toys perfectly safe.”
