China’s market shows potential

Posted - April 1, 2009

China’s pretty face

By Adriana Michael - As printed in O.W.N. Winter 2009

When people think of China from a business perspective, probably the last thing to come to mind would be high-end, certified organic cosmetics, but Jasmin Skincare has broken the perception barrier. Run by Gordon Chalmers and Lihua Song, an Australian husband and wife team, the company has launched itself into the Chinese market with great success.

Jasmin Skincare opened its first retail counter in a high-end shopping centre in Guangzhou in October 2008, with plans for seven more points of sale next year.

“Significant sales have kicked off this year with our products now becoming available around China and at counters in the major department stores,” Chalmers said.

With the beauty and lifestyle industry booming in Asia, Jasmin Skincare is ready to tackle it head on, but theirs is not an overnight success. It took the company three years to go through China’s stringent product testing.

After setting up in an old bio-dynamic fruit orchard and jam factory at the top of Mount Tambourine, in the beautiful Gold Coast hinterland of Australia, Jasmin Skincare has focussed since 2005, on foreign rather than domestic markets.

“China does offer amazing market potential,” said Valerie Bell of Bell Alliances, a Canadian based consulting firm that assists Asian and North American companies in the natural and organic food and health care sectors, “but interested parties need to be aware that there is need of strong commitment, perseverance and a readiness to make serious investment”—something Chalmers and Song were definitely willing and able to do.

Bell also explained that the best type of person to navigate business challenges particular to China would be someone with a dual upbringing, perhaps Chinese-American or Chinese Canadian, who was also perfectly fluent in the language and customs of that country. Given that Australian citizen Lihua Song was born in China and is fully bicultural, tapping into the Chinese market seemed the logical choice for Jasmin Skincare.

Though there are no official systems in place to secure a national distributor and gaining national media coverage is notoriously difficult for foreign companies, Song’s bicultural advantage opened many doors. Amazingly, most local and national TV stations in China and Hong Kong have offered Jasmin Skincare major coverage. There was also a program about her life story on national TV during the Chinese New Year celebrations.

“This is obviously a huge thing for a small company,” said Lisa Tristam, spa and aromatherapy business development manager at Jasmin, “and we hope it’s the start of something big.”
Queensland Trade Minister John Mickel said Jasmin Skincare was making the most of the booming luxury markets in China, and have to be commended on being the first certified organic skincare range to pass the strict Chinese Government import certification.
“The Chinese are traditionally tough negotiators ,” said Bell. “They want imported goods, but as much as they are willing to pay for organics, they also want low prices.”

Responding to customers’ needs, Jasmin is committed to helping people by having nutritionists and skincare professionals available to educate people about the importance of organics. In fact, education is how the idea for Jasmin Skincare germinated. Several years ago, Song’s father was diagnosed with cancer, and she started looking into natural medicines. What she found inspired her to delve deeper into natural healing alternatives and natural skincare products. A mere seven years later, Jasmin Skincare is poised to go national across China, a country whose sense of organics is not highly spread yet.

“In Hong Kong the organic sector is much more developed than in mainland China,” said Valerie Bell. “Therefore it is a much easier gateway to enter the giant tiger. Hong Kong has a bilingual workforce, lots of people who have travelled the world, a better mix of west and east. There are also large distribution chains based there to serve not only China, but also other Asian markets.”

These challenges notwithstanding, Jasmin Skincare’s strategy for China is to open more upscaled skincare outlets, holistic lifestyle and well-being stores, and Jasmin spas.

Riding high on the crest of their success in China after only four months, Gordon Chalmers said, “If we got a 12 million dollar order on our first sale, don’t tell me there is no market in China for high-end organic products.”