Aussie handmade soap company expands to China via diagou
Shearsmith’s brand, Aroma and Therapy, has entered into an exclusive three year arrangement with DaigouSales to distribute its products to Chinese consumers.
"We are really excited to be selling our soaps into China,” said Shearsmith. “Our soap products are made by hand, using ingredients which are free from animal fats… they are extremely gentle on the skin, environmentally safe, quality assured and not tested on animals.”
The new Silk Road
Like many small, independent brands, Aroma and Therapy has chosen the diagou route in order to avoid the complicated regulations associated with China.
Previously a nurse, Shearsmith admitted that she has does not have an in-depth understanding of business. However, confident that her products would resonate with Chinese consumers, she sought out a partner who could help Aroma and Therapy break into the market.
“Importantly, it needs to be someone you can trust, who is knowledgeable, and for me they needed to be passionate, and love what they were doing,” said Shearsmith.
In the end, she found and enlisted the help of DaigouSales and Mathew McDougall, CEO of DaigouSales, who Shearsmith believes is integral to the success of her expansion in China.
“I am pleased we are able to represent this brand as our Chinese consumers are seeking green products,” said McDougall. “The natural and organic attributes of handmade soaps are seen as the key reasons why Chinese consumers are opting for such cosmetic items.”
The diagou channel rose to popularity when daigou traders began supplying Chinese consumers with overseas goods, a demand that resulted from the lack of trust in locally made products. While it was once an unofficial channel, today daigou is now recognised as a legitimate distribution channel and is only growing in popularity.
For Australian brands seeking opportunities in China like Aroma and Therapy, the daigou route is the ideal gateway as there is lower cost and risks involved.
"Consumers in China love Australian products, particularly health, beauty and wellbeing brands, because our products are considered to be high quality, safe, and manufactured in highly regulated environments," said McDougall.
Keeping up with an “exploding” business
Aroma and Therapy was founded domestically in Australia in 2015 by Shearsmith with the intention of creating natural homemade soaps with a medicinal nature.
However, with a full-time job, it took Shearsmith some time to get it off the ground, only launching a website last November.
Today, Shearsmith has since left nursing to manage the business, which she says has “exploded”. In order to keep up with demand, she had a facility built behind her own home where she produces, packages and stocks her soaps.
However, if the company continues to grow, she may have to expand or find a new facility, even though she would prefer to keep her current set-up.
“I want to keep it smaller, I feel that it’s more personal that way. We get to know our clients personally and if we get too big we will lose a lot of that personalisation. That’s why we are trying to keep control of the size of it,” she said.
One thing she will have to expand, however, is the staff. Currently, the company relies on family, and sometimes neighbours to produce the soaps. But as everything is handmade with almost no help from machinery, Shearsmith said she will be looking to hire more people as the business expands.
China expansion and beyond
Looking to the future, Shearsmith is open to creating a personalised service and make bespoke soaps, something she has done for some customers already. “I’d love to do that, but I have to make it clear that I’m not a doctor and a skin specialist.”
Shearsmith is currently focused on growing the business domestically as well as in China. However, she hopes to introduce Aroma and Therapy to more countries in Asia, such as Malaysia or Thailand, one day.
While it has been suggested to expand in the US, she said she is more interested in Asia, as she is drawn to its people and wants to help them by offering a natural, clean product. Especially in China, she said, where homemade soaps may not necessarily be readily available. “This is not a commercial, make-lots-of-money soap,” she said. “It’s soap that’s going to help people.”