At least one category has seen a huge positive surge following the COVID-19 pandemic: Sexual wellness products, which have been in hot demand as people around the world stayed indoors.
Singapore-based Ramblin’ Brands, co-founded by former P&G marketers Mattias Hulting and Peder Wikström, has seen its Smile Makers range of vibrators and lubricants experience a three-fold increase in sales since January. The company is backed by DSG Consumer Partners, an India and Southeast Asia focused venture firm, which led a $4.4 million round in 2016.
Hulting spoke to DealStreetAsia about the company’s trajectory, fundraising and the challenges of being a pioneer in a misunderstood niche.
Edited excerpts of the interview:
How has COVID-19 impacted your business – both in terms of sales and manufacturing?
It is leading to a spike in demand for sexual wellness products as people stay at home through the shutdown and focus more on self-care rather than makeup or fashion.
The sales from most of our top customers tripled in April versus January as did our website traffic from all over the world.
Many retailers who were previously reluctant to advertise have now seen the momentum around the category and have started to promote it. We believe they’re likely to continue and that will have a positive longterm impact.
Our manufacturing partners in China opened up a month later than they were initially supposed to, but we have managed to catch up.
The key challenge at the moment is logistics. A lot of cargo is transported via commercial airlines. With over 95 per cent of planes being grounded, it is harder to find space. It’s more costly and the lead times are longer. Our operations teams are most impacted, but we’re making it work as best as we can.
Has COVID-19 affected fundraising for Ramblin Brands?
We’ve only done one proper round of financing, and that was when DSG CP came on board. Before that, we had a few smaller amounts from friends and family. The total we’ve raised so far is roughly $5 million.
We’re not actively looking at fundraising. We discuss it off and on with the board, but without a very clear plan, we don’t see the need for it.
We want to step up product development, but for now, we’ve decided that we will do a bit of pay as we go.
We’ve loved working with the DSG because they really understand consumer brands – and that they take a long time to build. Brands that will be around for the long term, manage to create an emotional connection and bond with consumers and stand for something bigger than just product. Even if we were to look for other partners, it would need to be somebody that really understands the consumer.
How has Smile Makers been performing and what does the path to profitability look like?
In 2018, we grew by more than 80%; last year we grew by 50%. April this year is triple versus January –it is about being profitable while managing to grow. We are profitable at the moment and hit that milestone last year.
Which are your biggest markets?
In terms of our absolute numbers, our biggest markets are the US and the UK. I would attribute that to a beauty and wellness retailer and etailer profile that does not really exist at scale in Asia. A lot of e-commerce here is marketplaces which tend to be transactional.
Where we really thrive is a beauty, fashion and wellness buy with a strong female founder who has a very dedicated following. Actor and Goop founder Gwyneth Paltrow has recommended our products many times. Cult Beauty in the UK and Adore Beauty in Australia are founded and led by very strong women. If you launch with them, and they post on social media, it is very influential.
That said, Singapore in terms of per capita is very strong. It would be in the Top 5 in absolute numbers. In per capita, it could even be at the top. Taiwan is also in the top five. The Asian markets are important to us including Hong Kong and Malaysia.
What about the wider Southeast Asian region – Indonesia, the Philippines, Thailand?
Not yet. Thailand is one of the few countries where the laws are less subjective. It would be very challenging for a mainstream retailer to be able to sell this product there, at least as it stands today. With Indonesia and the Philippines, it’s just a matter of priority – finding the right distribution and retail partner. We’re not there yet, but will be in a few years.
What have been some of the challenges you’ve faced ever since the launch of Smile Makers?
The idea was to create a sexual wellness brand for women who were like the women we knew. Our wives, sisters, mothers and friends did not like what was available at sex shops and were not comfortable buying there.
When we launched Smile Makers in 2012, we wanted to keep the whole development and commercialization of the brand completely out of the traditional options when it came to manufacturers, distributors and retailers.
The biggest choice we made was not to sell in sex shops – either offline or online, but in mainstream retail environments where women shop on a daily basis.
The first barrier was that in 2012, none of these retailers were selling sexual wellness products focusing on women. For the first couple of years, we basically didn’t have sales at all – just flash sales on more design-focused sites.
The first inflection point came when across Europe and Asia, we got a few big retailers to actually try out the brand. In Asia, it was Watson’s. It was the first time such a product had been sold in that environment. There were worries about it leading to some very negative PR reactions. But we found that it was a small minority of people who objected – fringe conservatives.
How did you convince the retailers?
We got better at telling our story and expressing our mission. We conducted surveys before we went into markets. Working with research companies, we would speak to 1000-2000 women trying to understand the importance of sexual health to them: how satisfied are they, what are the opportunities, their views when it comes to vibrators, and how many are using them.
It meant that we could tell retailers 25 per cent to 30 per cent of your female shoppers already buy this kind of product; two-thirds of those who haven’t yet made a purchase are curious to try and would prefer to buy it in your shop. Most importantly, we found that over 90 per cent of women of all ages react to the product positively or neutrally.
We began teaming up with the local medical community and would have them speak about the physical, emotional and health benefits of sexual wellness. These partnerships made it less about marketing.
To a certain extent, it was also luck in terms of who we made the pitch to. We found that the more senior the person, the easier it is. If you are reaching out to a junior buyer, they will be nervous about bringing it up internally.
What were some of the other challenges?
Insurance companies did not want to work with us, even though we were manufactured alongside known consumer electronics brands like Bang & Olufsen. They were looking at the purpose of the product instead of realising it was produced by a manufacturer with medical device ISO certification, who also makes luxury consumer electronics. Even some translation companies did not want to work with us.
There’s are still many barriers: the main one is around advertising – specifically on platforms like Facebook, YouTube, Instagram and Google. They all ban advertising for our kind of sexual wellness product.
It is not really clear why because they allow erectile dysfunction or premature ejaculation pills – male-focused sexual wellness products.
We call it the final frontier of the women’s revolution.
Could you tell us about your experience in some of the more conservative Asian markets? For instance, in India, while the products are not banned, there’s a lot of confusion surrounding the legality and the advertising.
India will be based on the old British common law similar to many other countries like Australia, Malaysia and Singapore.
It is very subjective. That can make it quite challenging but it also provides opportunities for brands like ours. Our mission is not to be obscene or to provoke. We want to normalize the category and not sensationalize it. If you look at our packaging, product design and descriptions, it’s all very friendly and approachable. Because of that, we have had an easier time with the customs or ministry of health officials.