Gaining New Ground

Chemcorp

Chemcorp is gaining new ground. Since we spoke to Founder John Fisher two years ago, his company has enjoyed strong growth and launched several new brands – giving us plenty to catch up on.
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The Sydney-based company produces, imports, markets, and distributes hair, nail, and beauty products. Flagship brand 1000 Hour is a staple on many retail shelves, as are many of the company’s other brands including Schoolies Hair Accessories, Gliders Hair Accessories, Protech, Vixen Hair Colour and Freestyle Hair Brushes and Combs. Other well-known brands that Chemcorp distributes include Ecotools, Real Techniques, Cricket, Rapid White, Dr Teals and Ice Drops.

Chemcorp distributes brands to all classes of retailers, including discount department stores, pharmacies, convenience stores, beauty supply stores – and now, supermarkets. “The recent growth over the last few years has been quite significant, and the main reason for that is because of our expansion into the supermarket area,” Mr Fisher reports. The company recently gained distribution into the supermarket area with Australian’s leading chains Woolworths and Coles, Mr Fisher points out.

A key Chemcorp strategy has always been to identify gaps in the market, and the expansion into supermarkets was no exception. “Both supermarket chains primarily just had their own brand cosmetic brushes,” Mr Fisher recalls. “We identified an opportunity where supermarkets could sell upmarket products to sit beside their own Private Label Brands.” Now, both Woolworths and Coles carry Ecotools, a USA-based cosmetic brush brand – at a price that is “nearly 50 per cent higher priced than their home brand. And our product is selling quite successfully.” Made with synthetic hair, recycled aluminium, and bamboo, Ecotools brushes offer consumers an earth-friendly – and high quality – alternative to the standard cosmetic brush.

The team also recognised a need for high quality hair brushes and hair accessories at Woolworths. “Primarily they were selling their own brand, Woolworths Select,” Mr Fisher explains. Now, since Chemcorp stepped in, consumers can find a variety of luxury, professional hairstyling tools at Woolworths under the Platinum brand. Known for their sleek, modern style, Platinum products include everything from clips, pins, and headbands, to combs and brushes.

The 1000 Hour brand has also made its way onto supermarket shelves. “We’ve been selling that brand for over 15 years,” says Mr Fisher. “And as our business grows we felt that we could expand our distribution into the supermarket area, increasing the exposure of 1000 Hour to a greater potential consumer base.” As with Ecotools and Platinum, “these products are much higher priced than what is the norm.” In fact, “ten years ago those sorts of products would not even have been considered.” Now, however, consumers are more than willing to pay a premium for quality, and all three brands selling well.

When Chemcorp is seeking to fill a gap in the market, the team looks for a product that is not a “me too type” and is not “generally carried by multinationals.” Quality is also of utmost importance. One of the most significant brands that the company has picked up in the last few years is Real Techniques, a cosmetic brush line designed with professional makeup artists Samantha and Nic Chapman. The brand is “probably considered the number one brand in the world today,” Mr Fisher reports, and sales in Australia have reflected the products’ worldwide popularity. Samantha and Nic Chapman’s celebrity endorsement has been a tremendous sales boost, and the Pixiwoo bloggers even launched a YouTube channel specifically to promote and provide information about Real Techniques brushes.

The team constantly keeps an eye on the American and European markets to identify products that would adapt well to the Australian market. Once identified, the team moves quickly to secure the brand and bring it to Australian retail shelves. Or, as with the case of 1000 Hour, Schoolies, Gliders, Vixen and Freestyle, Chemcorp might develop their own brand to fill an identified gap in the market, if the best solution is not already out there. “We definitely try to bring out the best quality product that we can and deliver it to the end user – something that is better than their expectations if we can,” Mr Fisher remarks.

The size of the company helps the team move fast to deliver the right brand as soon as possible. “As a smallish company we are able to move quickly,” Mr Fisher points out. “We don’t have the internal bureaucracy.” These advantages have been essential to achieving the company’s recent growth, he adds.

Chemcorp’s export arm has also grown substantially in the last couple of years, particularly in Southeast Asia. The company only exports its own brands, and the team works hard to continually expand Chemcorp’s reach. Maintaining an active global presence is vital to maintain progress, so the company maintains an affiliated office in Shenzhen, China and the team attends international tradeshows frequently. “We use them to help expand our business by presenting our products at those shows,” Mr Fisher explains. One of the most significant tradeshows that the team regularly attends is CosmoProf, a major industry event that takes place in multiple locations around the world.

Chemcorp has recently developed exciting new Hair Colour ranges, Vixen War Paint and Hair Graffiti – temporary hair colours and hair chalk in hot and spicy colours. The ranges are proving to be a great success in Australia and have now landed in the USA. It is early days, however Mr Fisher is quietly optimistic that the brand will be successful.

As Chemcorp increases its geographic footprint and reputation, getting the company’s brands onto store shelves is becoming easier and easier. “A lot of times people find us,” Mr Fisher explains. “As our business grows, there are always inquiries into our company. They see our product sitting in a major retailer somewhere in the world and they chase us down.”

There are remaining challenges, of course, although they are almost all industry based, rather than internal. For starters, “the major retailers are becoming more and more demanding [regarding] their margins and the promotional support they require from you to promote your products in their stores,” Mr Fisher reports. In addition, there is constant competition from retailers’ house brands. The fact that many retailers now import direct is also an added pressure. “There is easy access today for all Australian companies to import from China. It is a lot easier for them to find supplies and products than it was ten years ago, so we are always up against that.”

The Australian tax structure also stacks the deck against companies like Chemcorp. “In Australia there is no duty, no goods and services tax on imports under a thousand dollars, so that makes it difficult when we are providing products to retailers. They are getting high margins because the consumer can buy the same products from overseas online sellers and get them at prices well below the Australian retailer. It is a problem that all importers have in Australia.”

The Australian dollar also continues to pose a concern for the industry as a whole. “One of the challenges that we also have at the moment is the devaluing Australian dollar against the US dollar,” Mr Fisher reports. “Obviously, as our dollar slides it makes our cost of goods much higher.”

Fortunately, Chemcorp has been able to stand strong against these challenges, continuing to grow and break new ground in recent years. With exciting new additions like Real Techniques – and familiar staples like 1000 Hour – Chemcorp is successfully maintaining a strong position in the marketplace. Not surprisingly, the team plans to stay on its current path for the foreseeable future. “Our main focus is to continue to develop our export business and try to expand our distribution in Australia further,” Mr Fisher summarises. Considering that retail giants Woolworths and Coles are already working with Chemcorp in Australia, and that the company’s own brands are rapidly gaining traction here and abroad, these two goals should be achievable.

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July 19, 2018, 7:49 PM AEST