How this Australian family business turned China into its largest overseas market without ever opening a store there
The Turnbull government is relying on small business to drive the country’s economic transition, meaning there’s a lot of pressure on businesses to increase innovation and boost productivity.
One company undaunted by this is Oakwood, which over the course of 30 years has developed an innovative range of home care products and managed to make China their largest overseas market through online sales alone.
Oakwood is an Australian family-owned household care business based in Scone, New South Wales. The company was founded 25 years ago by Geoff Searl. In the years since, Geoff’s three sons have taken over the family business and managed to make a name for the Oakwood brand both here and overseas. Oakwood products are now stocked in major retailers across Australia and has made China its largest overseas market in just four years’ time.
Anthill spoke with Oakwood Managing Director Garth Searl on the company’s success here and abroad in the interview below.
How did Oakwood drive 100%+ growth in sales to China while being based in regional Australia?
In 2012, Oakwood entered the Chinese market as we saw the huge potential demand for high quality natural products. We approached the mainland market with a two-pronged approach, and have since seen export growth of 127 per cent in the six month period to December 2015. While many brands choose to set up a brick and mortar store in China to drive growth, we identified a local distributor to help manage product distribution, set up sales channels, and online sales in China. Oakwood is only available online on major e-commerce websites such as Taobao and TMall where we’ve managed to gain significant consumer recognition. Given that e-commerce in China shows no signs of slowing down, this has been a successful strategy for us. Oakwood’s online presence will also be complimented soon with the addition of a social media strategy within China to not only share news about our products, but additionally, content to add value to our customers with How Tos and Tutorials.
How did Oakwood turn a family business into Australia’s #1 product in different home care product categories?
Oakwood has a wide range of products – from wood care to leather care to pet care – and we enjoy a strong position across these categories in various channels. We’ve managed to do this by listening to our consumers and differentiating ourselves from our competitors. For example, for some of the fragrances we use in our products, we choose natural oils to evoke the smell of the Australian landscape, rather than generic and artificial aromas some competitors use. We initially promoted Oakwood on television through advertorials, and after gaining a reputation amongst consumers, we approached retailers to stock our product. That was over 10 years ago, and we’re now stocked in Woolworths, Coles, IGA, Supercheap Auto, Autobarn, BIGW, Repco and other specialist store all across the country.
How has Oakwood managed to stay nimble?
As a family business, we’ve been managed to be quick to respond to consumer feedback. We originate and control all product development and have improved our formulations over the years as our consumers use our products. One example of this was the response we received from some consumers that they found it frustrating to get the last amounts of product out of one of our bottles – and that the bottle was too hard and could not be squeezed. We immediately responded by developing a softer bottle and also amended the formulation to dispense easier instantly making the product more user friendly. Our attention to these few customers, coupled with proactivity and speed at fixing this issue (that took us a few short weeks as opposed to many months or years for many of our larger competitors) saw sales for this product increase instantly across all channels as all customers benefited. Attention to the smallest issue and speed at which you make these changes can at times have the largest positive impacts.
Another reason we’ve been able to be responsive to consumer needs it that we run a lean ship – we’ve chosen to outsource some operating areas such as product filling, warehousing and logistics to external parties. However we still maintain direct control over certain parts of the supply chain and our raw materials – from packaging supply and design to product formulations and ingredients. This is important to us as it has allowed us to focus more efficiently on the quality of products and customer needs/wants, and running the business and marketing.
Extracted from http://anthillonline.com/australian-family-business-turned-china-largest-overseas-market-without-opening-store/