Tom Pattinson speaks to Joy Isaacs, founder and CEO of Argentum Apothecary, to find out how changing the company’s China strategy – and offering a local company a minority stake – helped them make the most of their new found popularity in the market
Singer Faye Wong is one of China’s most recognisable style icons. Her stratospheric rise in the 1990s as one of China’s first musical superstars made her a household name. Decades after she first rose to fame, hundreds of millions of women across China have wondered how this woman in her early 50s has retained her youthful looks.
All was revealed after her daughter posted a picture to social media of her mother’s dressing table, featuring a mysterious elegant black jar. The little black jar contained an anti-ageing serum by boutique British skincare brand Argentum – and just like that, the company became something of an overnight success in China.
“We have a really distinctive black shaped jar that really stood out in the photograph,” explains Argentum’s founder Joy Isaacs. “Suddenly everyone was clamouring to get hold of this product,” she says.
Isaacs’s company uses a patented combination of Silver Hydrosol and DNA HP (thus the Ag in the name) to create natural, restorative and super-hydrating anti-ageing skincare products. The brand has built a strong presence in China, where the demographic of luxury skincare spans a much broader age range, with more and more younger people investing in the future of their skin, says Isaacs. “In China, there is an understanding of silver and a focus on luxury skincare that delivers results. Our formulas score particularly high when targeting acne and blemishes which is a common skin concern in this part of the world.” But the demand created by Wong’s daughter’s social media post took Isaacs by surprise.
“We had two Chinese team members in London and Shanghai who were both helping us work with a number of different distributors in China, [but] it was very hard to align multiple distributors on different platforms and across different regions,” explains Isaacs. This made it difficult to effectively manage the growth they were seeing.
“Large online retailers and cross-border sellers would have as many as 200 authorised resellers, and multi-brand stores would have sub-distributors,” says Isaacs. With so many different resellers, keeping up with pricing and offers was very challenging. Furthermore, UK or Europe-based retailers and distributors would resell to China too.
Sometimes resellers would discount products, not only affecting pricing but also making it difficult to control brand image, a common concern for luxury brands. “Some of our China distributors were investing tens of thousands into a campaign only for it to be undercut by external wholesalers, undermining the whole campaign,” she explains.
Eventually, after a number of meetings and working with one impressive distributor, they decided to create a more permanent partnership, selling a minority stake in the company. Having a local stakeholder means Isaacs and her UK team don’t have to get bogged down navigating regulations and controlling pricing. What’s more, now, “everyone is on the same train and heading in the right direction.”
“It really has accelerated our growth in China enormously. They have been able to support in registering our products on the ground and growing sales in a sustainable and authentic way. For example, we are launching in China Duty Free, which enables us to sit alongside the biggest international brands,” says Isaacs. “It also enables us to concentrate on our creativity.”
Isaacs has diluted the company by selling a portion to a Chinese distributor and growth accelerator, but, she says, “it was absolutely the right thing to do. When you see what they achieved for our brand in just one year – there is no chance we would have been able to grow this complex and fascinating market alone.”