COMPANY PROFILE: B.box has been redefining everyday baby essentials since 2009. Today, the company has a team of over 20 people and distributes its collection of over 20 products in 800 stores nationally and 35 countries. b.box has won a host of awards, including the 2016 Telstra Small Business of the Year and the 2015 Australian Small Business Exporter of the Year.
IRW: How was last year for B.Box?
DM: Last year was massive for us – we kind of moved from being a small business to a medium-sized business.
We actually grew into our new head office facility and we tripled our warehousing space, which reflects our sales. Our team in the last 18 months has tripled, so 2017 was a big year in terms of sales and revenue – we had more than 100 per cent growth year-on-year to date, which is great. As a business, we’ve got an inhouse team of fulltime designers and in-house marketing – we’ve really invested a lot in getting ourselves ready to kick it to the next level, which is what we’re working towards for 2018.
We do our own operations in the US, which is a big market and for us. The toddler feeding space is immensely competitive, so we are constantly trying to work through how we can differentiate, how we can compete with competitors who are bigger than us, size-wise and resource-wise. Can we get products faster to market?
IRW: What has 2018 got in store for the business?
We’ve hit a sweet spot with toddler feeding, but in the next six months, we’re looking at launching products that take our loyal fanbase through to that next level. Customers are asking us, ‘My child has outgrown the sippy cup and I trust B.box, can you do cool things for the three-to-seven-year-old market?’
I think we have such a loyal following because we listen to our customers. People give us an idea and we’re genuine when we say, ‘That’s a great idea, we’ll discuss that with our designers.’
There’s a massive opportunity for us in the US. People love our products, but we’re competing against established homebrands, so we’ve recently started working with a salesperson in the US so we have someone on the ground helping to boost our retail outreach.
We’re looking at Amazon as well, which has been a big move for us to sell direct in the US – that’s enabled us to reach more consumers. Some retailers choose a hero product that is safe to sell on Amazon, but we have a suite of over 20 products and they’re selling strongly.
We’re focusing on our marketing efforts into Amazon in the US and we’re doing a lot of consumer shows around the US. We’re doing 18 this year, it’s all brand building and awareness and looking at that translating into revenue.
In Australia, it’s highly competitive, but it’s a relatively small market in the global scheme of things, so we’ve had to look at how we maximise opportunities here. It’s home for us, so we test all our new products here and we sell through Chemist Warehouse, our largest domestic retail account, which has been massive.
We need to think more creatively about how we can market direct to the consumer without cannibalising our wholesale. At the moment, we’re looking at setting up different bundles of offerings on Amazon – not the whole range, but the most popular range of products that are at a great price point for the consumer. We want to see how we can leverage the opportunities marketplaces are presenting for us.
IRW: There’s certainly been a rise in marketplaces in retail, hasn’t there?
DM: People are feeling more comfortable shopping on Myer Marketplace or Amazon, even more so than buying direct from brands online. We’re certainly seeing that shift and it will be interesting to see what happens in Australia, which is following what’s happened in the US and Europe.
People run their entire businesses on Amazon in the US. It won’t be that massive here – we still like to go into stores, to touch and feel and get advice, particularly with baby products, but people will research in-store and then look online.
People have more choice now. I ordered something from the US on a Thursday and it was in my office on a Tuesday – it was crazy. It cost me $20 to ship it here. It’s not cost-prohibitive anymore, so the consumer has choice, which means we as a business have to respond to it. If this is what the consumer is telling us, we need to be on the front foot and helping them make that choice for B.box rather than going with a different brand.
We have warehousing in Europe, China, the US and Australia to allow us to get product quickly into the hands of the right people. In Europe, we’re looking at Amazon too. We have distributors in some countries and in those that we don’t, we’re looking at how to get a foot in the door. For a lot of companies, both big and small, marketplaces give you an opportunity to get your foot in the door with a relatively small investment.
IRW: Given B.box has been selling on Amazon for awhile, what advice would you give other businesses looking to work with it?
DM: Don’t be intimidated by Amazon. Do your homework, understand how the business operates and how to get the best out of the platform. It’s not a people-driven business, it’s all about algorithms.
You can’t underestimate that in order for Amazon to work for you, you have to put in the work – you can’t just put your products up on Amazon and think they’ll sell. You have to market it through the platform and know its ins and outs. If marketplaces are the way that things are moving forward in the future, we almost need a resource dedicated to servicing marketplaces, because it’s a different channel to our website or stores.
It’s about engagement, service, responding to reviews, working out what competitors are doing and pricing. If you’ve got a product, Amazon will trawl the internet and whatever the cheapest price is that same product is being sold for, that’s the price they will sell your product at. You don’t want to start a price war for products, where it becomes a bidding thing and people are looking at the lowest possible price. It’s about maintaining your brand integrity.
In the US and Europe on Amazon, there are digital storefronts on Amazon so it looks like your website. You manage it, but it’s it’s different to managing your own website and you constantly have to be up to date with everything Amazon is doing.
I always say that marketplaces are like toddlers – once you’ve figured out their routine, they’ll change it on you. They’ll constantly mix things up. Amazon is in the business to make money, so they’ll work out which ways they can maximise their returns and we have to work out which bit of margin we’re prepared to let go for a gain. We’ve had a lot of pressure on our products to drop the price, but we’ve held firm and said no.
They might be Amazon, but it’s still our brand – the power is with us to say ‘yes’ or ‘no’ to something.
We were just in New York for work and there was a UPS truck outside an apartment building at the back of the truck, every single product was Amazon. I don’t think we’ll see drones dropping products at the back of trucks in Broken Hill, but I think that it would be naive to think Amazon won’t have a major impact on the retail landscape here.
Marketplaces are exciting and a good opportunity for brands to get more consumer awareness.
IRW: Tell me about what B.box is doing in China at the moment.
DW: We’ve succeeded in creating a globally-recognised and sought-after brand. Consumers in China are massive for us and our brand has just resonated with the Chinese parent.
We’re big in China, Korea and Japan and we sell into Singapore, but we haven’t yet hit Thailand, Indonesia or the Philippines. We’re just going into Malaysia now. There’s a whole gamut of Asia that is yet to be conquered by B.box.
B.box is widely available on Tmall, Taobao, JDmall. We work really closely with our distributor in China and we are actively involved in every aspect of the strategy and execution in China. China is so innovative in its online sales opportunities and platforms, it’s incredible. It’s been massive for us in terms of getting the brand out there. Shanghai alone has the same population as Australia – it’s mindblowing how big the country is and it’s got a massive middle-class that’s only getting bigger.
IRW: What advice would you offer businesses looking to sell in China?
DW: If you’ve got a unique product, protect your IP in China. You have to know how it works over there. The Chinese are so entrepreneurial and I think that surprises a lot of people. You can’t go in there with a western perspective, you have to know how they work. In China, you’ll see 12 hardware stores right next to each other, selling ladders and you think, ‘How do you make money?’ But they all do.
We’ve had people counterfeiting our products and we’ve spent a lot of time and money defending our products there, but the reason we can is because we’ve invested in our IP in China – we manufacture in China and patent and product in China.
If you have your own products or services, protect your business in China. We knew someone who didn’t trademark their logo and now someone else has trademarked it and it’s being held to ransom – they can use it, but they’d have to pay the other company $200,000.
Know which point in the market you want to hit and which platform attracts those people. If you have a high-end protect, don’t stick it on Taobao. There are different marketplaces and China is a massive leader in marketplaces. Someone explained to me the other day, they don’t have Facebook there, they have 50 different Facebooks. They don’t have Ebay, they have 50 different versions of it.
Make sure you have somebody on the ground who’s on your side over there. It’s a false economy to think you can do it remotely. Even if you’re just selling there, you need someone there who knows how it works and speaks the language.
IRW: Are there any particular e-commerce trends that you have your eye on at the moment?
DM: Exclusive online offerings. People like to walk into a store and know something’s exclusive there, but I think people want a better online experience than what they’ve been getting. When you go into a shop and receive something, everything’s been nicely wrapped and put in a bag for you – you get a warm feeling.
I think we’re going to see more of that coming in e-commerce, so when a parcel is delivered, it’s got a nice message, it’s wrapped beautifully – it’s an experience rather than a transaction. We want people to get excited when they see B.box arrive on their doorstep.