Hello everyone and welcome to this episode of my interview series. Today, we’ve got Rob Robertson. From Star Brands Asia. Rob is a China veteran. He started studying Mandarin in 1981 and has spent most of his career in China and has been sort of in China ever since. And he now, as I said, runs Star Brands Asia which really helps international indie brands, in the beauty space expand in China.
Rob. Thank you so much for joining me. Pleasure to be here. As you sort of focus on indie brands and that’s the main audience that we have for this podcast, I really wanted to start by giving a bit of an introduction to Star Brands Asia. It’s not a traditional distributor or trade partner.
You really look at things a bit differently. It would be great to hear from you how that works. Yeah we work with a smaller number of brands and we tend to go very deep with each brand that we have.
Why do you see yourselves as a brand partner for China?
Well, you know the ecosystem in China is very complicated. It’s linked, interlinked and overlapping, across functional areas and across channels and it’s changing all the time. What we feel and because I come from a long background in brand management.
What I really felt was needed in the market was, a company that could be a total brand partner for China, to solve whatever issues that pop up from trademark, to inventory managements, to brand marketing and influencer programs and so on because I really felt that there was a gap and, you know we all know the stories of indie brands that haven’t been successful over the years.
And I really had a passion personally for helping those brands succeed. That’s kind of where Star Brands Asia came from. Our company is organized into three groups.
Three big components of the business that we cover:
- brand management
- online management and offline management
- the core concept behind our company is a little bit different. We talk about 4D brand curation.
Four dimensional brand curation, because I got tired of hearing about 360 degree marketing, you know that really doesn’t solve the problem. You know, it’s not about 360 degrees. It’s kind of more dimensional than that.
We organize ourselves and focus ourselves against stuff for different dimensions, and I have hand motions. Channels. We go across all channels. Myself and my team members have plenty of offline experience as well as online.
Although most of our business is online now. We operate on about 10 or 11 different channels online and several offline as well, and then functionally we cover all aspects, from legal matters to back office, to social media and influencer marketing and Salesforce management and KPIs and online TV services.
We handle all functions. We’re focused on the Consumer journey, rather than that’s where I kind of part ways with 360 degree marketing, cause really it’s marketing and sales are no longer.
I grew up in that world and I’ve been in that world for so many years. But I think focusing on moving consumers through the journey, from awareness to loyalty, is what all of our work involves and then the fourth one, I’m not sure what the symbol hand motion for that is we take you through the changes.
A lot of brand partners. So-called brand partners in China will say I can put you on tmall, great. Okay. Now what? From the beginning it kind of made me feel uncomfortable because you lock into one partner or one plan of attack that prohibits you from other expansions in the future.
We take a long-term view and we really just try and move brands through the changes from let’s say, cross border. To domestic e-commerce to bricks and mortar retail, to travel retail, to kind of create, to evolve and grow the brands over time. We think that’s a unique approach.
We’re doing it now. It’s working, working quite well I’d say it’s not for everyone but we’re here for the brands that need us and if a brand is interested in kind of a deeper partnership then we really find a lot of value in that.
I mean I think the thing with brands and a lot of brands that I work with they are looking, they don’t know what the different options are right.
They’ve heard of this TP model, but the TP model requires a lot of management, a lot of work from the brand side. They really have to manage that relationship. They keep control, some control.
More control than a distributor, but they have to really manage that, and a lot of the indie brands in head office A don’t have anyone with the skills of the market and B they don’t really have the capacity to do that from the other side of the world.
I think this model where you’re effectively their team on the ground, without them having to hire everyone internally and set up their own. Entity in China then I think that that can be really good for brands that are especially brands that are brand led.
They really want to establish their brand in China for the long term. I think it’s a good model that you offer. Everyone thinks it’s e-commerce, it’s online, it’s kind of like a video game and the electronic signal goes from me to you and then everything is fine, but it’s really not the case.
Just like an offline Salesforce, TP is your online Salesforce and face to face communication is key. Especially when you’re talking about transmitting brand values, but even product messages and product stories and the stories you tell on social media capturing the keywords, when we’re doing search engine optimization within Tmall. All the things are very important and the human side is a big part of that.
That’s one thing I’m very happy about is with all of our team under one roof. TV operations, social media, and influencer marketing teams all together. We just find it’s a lot easier. We do have with Morphe for example but our other brands are similar.
We have high interaction and our goal is to make the brand happy to make the brand successful but I find when it’s working we have higher level conversations about how to make the strategy work and then when we get off the call.
There’s just a tremendous amount of detail that has to happen, it has to happen well it has to be followed through and it’s very detailed over here. Every influencer we work with has a separate contract.
There’s any aspect of the business you get into even logistics. We have a different logistics solution for every e-commerce platform we work on. On our side it works but if you’re outside of China, it’s quite strong. Extremely complex exactly.
You obviously have lots of different brands that you work with with indie brands coming into China.
What are some of the key challenges you see that brands face when starting to enter the market?
I think when you’re considering entering the market and I know everybody tells a story but I get to, okay we want to launch Tmall next week. We’ve decided to launch Tmall and it’s like well, who are you? What do you want to accomplish?
I think the first challenge really for the brand and I know this is what you do. What do you want to achieve in China? and then do you have a plan that is gonna make that happen? And that really guides we’re very flexible.
We work with different channels in different ways for every single brand because the brands have different objectives and we’ve, our partners have taken the time to understand for themselves.
What it is they want to accomplish and then we kind of guide it, does that mean you’re highly focused on Tmall? Does it mean you’re trying to end our offline shops which we also do. Does it mean you’re focused on two or three star products? What are your star products?
I mean there’s I should have a checklist, maybe you have a checklist of the things, audit yourself as you’re coming in. Do I know what my star products are? What’s the Chinese perception of my brand today because as I think most brands know as well that everything is on Taobao. Everything is on Little Red Book but it may not be what you want it to be.
How do you grab a hold of the message? There’s a lot of things to think through. Shaping that message. I think the first step is understanding what that message is right? Like what are people saying about you?
Brands are often surprised at how some product that they don’t necessarily push globally has become a hero product without them doing anything in China and this happens all without brands having any idea most of the time.
I think that’s a step that brands have to take to understand that before they leap in and working out that, as you said the hierarchy there’s sort of SKU, which SKUs but also the hierarchy of messages.
What is your messaging for China that will resonate rather than it might it will probably be different from your global messaging?
There’s so much value in that just understand. It sounds so simple but it’s actually usually isn’t happening but when it does happen it’s like okay I can see what people are talking about.
I can see there’s a product basis underneath it. Like the products really delivering nowadays with an online business, the product has to deliver. That’s just a reality.
If you can identify okay at the product level we’re delivering and then at the messaging level, well this is how people are talking about it and we think we can kind of amplify that and you just take your marketing budget and you just focus it on one thing and it can be hugely, hugely productive.
Yes. Focus, focus, focus. That’s something I’m always saying to brands, everyone’s so ambitious. They’ve got all these great products.
The brands love all their products but you’ve got to focus in China because it’s such a expensive it’s a big market. Of course we all know that but also it’s a expensive market to operate in from a marketing perspective. If you don’t focus you just get lost in the noise. Right? Don’t you.
That kind of leads to the second level or the third level of marketing strategy which is not just the product but who is my target consumer and what is their unmet need? It sounds so kind of old school, kind of an old school guy actually although I’m doing new things all the time.
I mean, that’s a way to help conquer the size. You can’t just go out and say okay, I’m gonna compare myself to Perfect Diary or Maybelline and we’re going to send out this message, but if you can identify for example in makeup, foundations. We’ve got some kind of a foothold there. It’s a more loyal segment. Liquid foundations is even more specific.
What problem is it that consumers are trying to solve when they choose a foundation?
You can start to really be productive with your inside marketing investment on platform. You’re going against very specific search terms and then which consumer you’re going after.
We measure everyone measures but we measure as well the return on investment for all of our insights spending and one search term is not the same as another one. That’s where it really the connection between like the social media and the online team where the rubber meets the road.
Have you identified those high productivity messages to product benefits that can drive profitable business?
Absolutely and as you said it sounds simple but it’s absolutely crucial to get that cut throat. Right and it’s not simple behind the scenes.
One other thing that I wanted to ask you about was this sort of trend of distributors in China. Wanting to take a stake in brands I’m talking to more and more distributors and they’re sort of saying we now really want to have investment in the brands that we bring into the market.
Do you have any advice for brands that are considering more distributors?
It’s been around for a while. I mean, the early runners were there four or five years ago, maybe even longer and now almost every day you hear about someone taking a stake in a global brand, and I think it’s really at the brand level.
What is it that you’re looking for? Because it is like getting married. It’s even maybe more, more permanent than getting married really. but I think it really does depend on what the brand wants. I mean I think it can be a good decision for some brands but I think the due diligence, the type of work that you do, we could do that as well.
We haven’t turned our focus there, but the partner you pick is really important because there are the folks that are really gonna sincerely try to build a long-term brand in China for you.
There are also folks who were trying to pop up a business model and flip it and that sounds kind of negative but I mean I think most of the operators in China with all due respect.
They’re looking to flip in three to five years and getting going from a distributor business model which has a acquisition value of maybe five times net sales. If you have ownership in a brand all of a sudden you’re 20 times net sales right?
The reasons they want to do it are quite obvious. You just need to be careful about that but I think it can really work. I mean I know Profex for example is working with CoreS.
That seems to be a good partnership on both sides. There’re some interesting cases out there, but it comes back to really what is it that you want?
Is it that you need the money? Is it that you want to explode the business in China? it’s a tricky decision really. It is a tricky decision and I think brands especially when they’re first coming in, it’s a very big decision as your first step into China to take that money.
At the same time finding the right partner is such a crucial, you need to find the right partner to be successful in China because you have to rely on them so much for all the Intel, all the strategy that they are your brand effectively in China.
And I think so often brands are not happy with their trade partner or not happy with their distributor and I know we were talking before about brands coming across to you guys from other partners because I guess they probably realize that they need more of that. I don’t want to use 360 after your, the 4D muliti dimensional aspect.
Definitely and one thing actually on that because you talked about the fact that you guys do offline. Obviously you have some brands that are registered and they can go offline, but now with the changes that we’re seeing with the animal testing requirements presumably, that places you quite well to help cross border brands sort of expand into offline.
Do you have advice for cross border brands who want to expand offline?
Well years ago we knew this would be happening. I’m not to say that it’s a total genius move because obviously it’s like well I mean if you think five years in the future of course it will be different.
Our vision has always been the same that we want to expand your brand across all channels and it’s just a question of step-by-step how do you get there? In China, sometimes it seems like you’re, dancing across the Lily pads to get to your destination and somethings are just a stepping stone and not really a long term solution for example.
Cross-border retail itself, cross-border e-commerce itself. I mean if you have the whole business domestically, then cross border doesn’t really make any sense anymore, but it got you to the next step and then you can keep moving. I think now the retail environment we’re ready. We’ve got team members focused on that.
We have backgrounds, most of our team leaders have backgrounds, from doing real offline business. There’s not that many folks. Most of the people coming to the brands are online only and it’s different. You’re trying to manage a team of BAs on a department store counter,
It’s a different kettle of fish, but we’re quite comfortable with that and we’re quite happy we’re moving we have a strong business with Morphe cosmetics brand in the Colorist. Which has had explosively high growth. It’s like a low end Sephora and now we’re moving into Hainan travel retail. It’s surging and the operators are looking for strong indie brands.
But no one has any Salesforce down there at all. In conjunction with our investor, Blue Bell Group. We’ve established an office in Hainan. We’re prepared to deliver top quality retail management from end to end in that environment and the productivity per door is, we were talking to Ranch Morning very respected, and indie brand his name I won’t mention, but the turnover per door is like nothing you’ve ever seen.
The opportunities come up. An environment like that it’s a high quality environment surrounded by the best prestige brands in the world. Even though the pricing obviously travel retail, it’s always a discounted pricing model.
But it’s very much of a prestigious environment. Hainan is such a big opportunity. Obviously we’ve seen it. We’ve seen it explode in the last 12 months and I think with the changes with animal testing, there’s a lot of legs in the Hainan business. It’s great that you guys have that edge really.
I guess lastly just to finish as you work with indie brands in the market all the time. I wanted to sort of get your trends. What do you think in terms of beauty at the moment in China?
What’s a trend that you think is something that brands should really know about?
Well we just talked about Hainan and that’s a trend and the time is now. I like the DOUYIN shops. I mean it’s still quite new. We’re there. We’ve been doing live streamings and video postings on DOUYIN for awhile and now, brands can complete the purchase cycle on DOUYIN which has really we’ve found it working very well because the old.
The traditional posting method on DOUYIN tended to be quite expensive and it was hard to find the ROI, but we can see the ROI now. We’re very happy about that. Also KUAISHOU. Kind of the competitor of DOUYIN.
I wouldn’t say it’s rocket science but it’s really working well for us. I mean what’s really trending is Chinese brands. I personally spend a lot of time observing and trying to learn. We’re just absorbed with learning every day. We need to just keep changing, but it’s quite impressive, Perfect Diary and Floracist and some of the other brands are doing impressive work and they’re doing it at rocket speed.
We spend a lot of time, just observing and saying well what can we apply to us?
Because you can’t just say. We’re going to follow. We’re going to do it the same way they are, because they’re spending maybe 300% of their sales on marketing and things like that my brand partners can’t really do, but we do try and search and reapply as the old saying goes.
What else is new? It feels like everything is new. Well the animal testing going away is going to create a whole new world. I think Sephora might finally have it’s day. Fought so hard and they’ve done the best they can but there’s still probably only 7% of beauty in China. Now they have their chance.
That’s a really interesting one Sephora. I often wonder about how they’ll be able to adapt in China and hopefully with these changes they’ll get a more interesting product mix and brand mix but they’ve got a stiff competition. The Colourist obviously it’s lower end, but it’s much more retail theater
it’s much more exciting. You’ve got Harmay that has such an interesting model. There’s a lot of dynamism there [00:22:00] from the local retailers that Sephora they need to step it up right, I think. The digital connection to offline is also trending heavy.
Where I see it now the latest kind of explosion that I’m watching and trying to figure out how to capitalize on it, is back to Hainan because you think travel retail it’s like well since when was travel retail ever digital? I mean absolutely not.
I can remember some tailgaters from years ago from my own background, but now almost every week there’s major announcements of how, now the consumer you can fly to Hainan, you go home. You don’t even waste your time shopping because you want to go to the beach.
You come home you have 180 days to use your quota and you can buy the same pricing online, and now that was like wow. That’s a game changer. I could quadruple the sales of you know so-called Hainan actually it’s, they’re like doing cross border from mainland China over to Hainan and now, they’re building cross border into that.
Which is just emerging today, I can’t fully explain it in the digital acts, the digital activations happening there are frighteningly effective. There’s new playgrounds to go and explore all the time so.
Absolutely well, that’s a lot of interesting trends there and I think the Hainan one is really something to something for brands to keep a very close eye on because there’s a lot of opportunity there, and obviously it’s being encouraged from a regulatory perspective as well. That always helps in China. Rob, thank you so much for that.
There’s lots of information in there.
If people want to get in touch with you and hear more about Star Brands Asia, what’s the best way for them to do that?
They could email me or WeChat me sorry I’m kind of a WeChat guy. They could find me on LinkedIn. I’m not sure how your podcasts work but if you can put a link somewhere that would be a good way.
Absolutely. I’ll put the details below and I’ll put the link to LinkedIn as well which is always a good way to connect. Thank you very much. Thank you. It’s a pleasure.