BEIJING — The vertically integrated e-commerce model has transformed the retail business for adult products, which is estimated to have a market of $5 billion (30 billion yuan), Shanghai's China Business News reports.
Unlike other parts of the retail sector, the impact of the Internet on businesses selling adult products has been rarely discussed in China, although on the online market it has reached $1.6 billion (10 billion yuan).
Chunshuitang, which launched in 2003, is one of the leading players in the online adult products business, controlling a market share of over 30 percent and forecasting record sales of $49 million (300 million yuan) this year.
Company founder Lin Degang said the vertically integrated e-commerce model has helped eliminate the role of suppliers and distributors and ultimately cut 60 percent of the costs.
70 percent of company sales come from its websites, while its online branches at e-commerce platforms, including Jingdong Mall, Taobao and Amazon contribute 20 percent. The remaining 10 percent comes from sales of its core products, according to Lin.
The company expanded through a licensing deal, establishing a physical presence across the country between 2006 and 2008, but decided to end operations because of issues surrounding counterfeits and distribution. The company now only has one brick-and-mortar store in Beijing.
Recently, Chunshuitang also ventured into the smart device business, launching a product called the "iBall," which incorporates a kegel ball and connections to mobile devices. The product is aimed at women who have just given birth and includes a feature that allows users to compare their results with each other, Lin said. More than 20,000 iBalls were sold than a month after its launch.
Chunshuitang also borrowed its marketing strategies from leading e-commerce companies, including Alibaba's Singles Day campaign, and created a "69 sales day" on June 9.
The rise of social media has also helped businesses promote adult products, given the low visibility of such items in the traditional media.
Condom maker Durex reports success with its online marketing in China. Its Twitter-like Weibo page has nearly 1.2 million followers, which helps promote the brand through discussions surrounding the company's posts.
Chunshuitang focuses more on encouraging word of mouth promotion among users of its products, with around 80 testers sharing their experiences through the company's Weibo page.
After two rounds of fundraising, Chunshuitang is planning for an A-share listing in 2017, local news sources reported.
