The fight gets down and flirty

Australia may be an island but in a global market, domestic start-up companies cannot act as though they operate in isolation. Local retailers may be feeling the pinch as consumer confidence remains depressed but compared with basket-case economies in Europe and the US, Australia is a new frontier for global operators wanting to extend their reach.

A sector facing the arrival of an overseas competitor is one that operates in the bedroom. A US company, Pure Romance, has just established here. It is a direct sales, party-plan business (like Tupperware) that sells lotions, potions, lingerie and adult toys. It might sound risqué but Pure Romance is not breaking ground. Local operator Pash Australia has been running Pash Parties for groups of women since 2004. “We pioneered the genre,” Pash founder Jo Karabin says.

But history means nought to an aggressive new competitor. In one year, Pure Romance claims it has reached $1 million in turnover from a soft launch of the brand in Perth. A West Australian woman who had heard of the company enquired about being a party consultant. The US business obliged as part of an experiment along the lines of “build it and we will come”, Pure Romance founder Patti Brisben says.

Well, it’s built and they’re coming. Company president and Brisben’s son, Chris Cicchinelli, says the company will spend $1 million on marketing the Pure Romance parties over the next year to recruit consultants and encourage intrigued consumers to host parties.

Cicchinelli researched the market extensively before establishing a Sydney warehouse and head office. “We wanted to open our business in a growing economy for these types of products,” he says. “We’d reached out to a lot of manufacturers that sell this type of product in the States that are now doing business here and they’ve had extremely large growth trends, in the bookstores or what you guys would call adult shops.”

He also looked into existing adult toy party operations such as Pash but was unperturbed. “There is a lot of what I call unorganised but yet productive groups that are here, [such as] Pash Parties, Positively Pink, a couple of other different groups that have done very well,” Cicchinelli says.

He believes the domestic businesses do not have the capital or infrastructure to grow at a fast rate and invest in marketing.

Karabin knew about Pure Romance’s operations in the US and around the globe – the company has 70,000 consultants worldwide, including in the Caribbean, Germany and South Africa. However, she had not heard they were operating in WA, where Pash has about 30 consultants. “They must be really under the radar,” she says.

Karabin remains optimistic about her new competitor. “I’d be foolish if I didn’t say it was a threat to my business but I’m excited and I think it will grow the category,” she says.

“We like to see it as an opportunity.”

In terms of consultant recruitment, a key way that party-plan businesses expand, Karabin says, “not everybody wants to be part of a big American organisation. Some prefer to go with Australian home-grown companies.”

Nonetheless, she also realises that to retain and increase her market share she will have to fight.

“The push for us is getting more visibility,” she says. Strategies include supporting female-focused charity events and partnering groups such as pole-dancing schools. Pash will also turn to the customers it already has and work its 100,000 strong database. Finally, it will pump up its use of social media and search engine marketing – the company already has a presence on Facebook and Twitter.

“The internet obviously provides lots of opportunities for companies that are smaller to be a little bit cleverer in the way they market,” Karabin says.

“We may not have the budget that those big guys do,” Karabin says, “but we didn’t get to the size we are today without having solid strategies.”

Karabin declines to provide her revenue figures but says the number of Pash consultants has doubled to 1200 since the 2007-08 financial year when her revenue was $1.23 million, placing her 89th on the BRW Fast Starters.

Pure Romance’s campaign is not without its challenges. “We’ve got to make sure we come in and adapt to understanding more about the women of Australia and make sure our brand, the terminology we speak is all consistent,” Cicchinelli says, adding the company will achieve this by surrounding themselves with local knowledge.

“We’ll be putting in smart people and making sure we ask our marketing and PR firms to help us set up focus groups, to say ‘are we saying the right thing?’ ”

And lesson number one? “We learned ‘fanny’ was a different word.”

BRW

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