Description
The Market
The market is valued at approximately US$3 billion and is estimated to grow to US$25 billion by the mid 2020’s (includes Adult Toys, Lubricants, Massage Oils, Luxury candles, Erotica, Sexual accessories) *
100 million women (aged 17-70 years) are regular users of sex toys. In the next decade, 300-400 million women will buy some form of sex toy or accessory *
Nearly half of all women under the age of 65 use or have used a vibrator. 93% of women engage in solo sex & 75% do so regularly, with 46% using some form of sex toy while doing so *
80% of all sex toy purchases are made by women *
A high % percentage of women do not like the current shopping environment, labelling it as ‘tacky’ with poor packaging being a major factor *
There are very few online sites or physical stores that appeal directly to the mainstream female consumer *
The sector is relatively immature. Only about 8% of the market value in sex toys can be attributed to premium products & in general presents no brand value recognition to the consumer, which is due to, *
Inadequate retail infrastructure
A lack of understanding of the market and consumer
A lack of branding and marketing
The over 40’s age group is largely ignored in this category
There is a major difference between what shopping environments the female consumer would like and what is mostly on offer. Over the last decade, the market for female erotic goods has succeeded in spite of the supply side/ retail environment, not because of it *
Business Summary
In 2011, after 10 years in the industry we started a new business & brand called Little Hussy. The objective was to capitalise on the market opportunity that existed, which was to move ‘Adult Retailing’ into the mainstream retail environment & away from traditional adult retailing, focusing on health, wellness and the female consumer
The objective was to focus the business purely on e-Commerce & internet marketing
To fast track the brand & gain maximum exposure & recognition we successfully pioneered the introduction of this category to Australia’s two biggest e-Commerce retailers, Groupon Australia & Catch of the Day & also Groupon Hong Kong. This was a major break through in changing the direction & perception of adult retailing
We developed our own brands. Little Hussy | Love & Play | Love and Health which sold strongly when introduced to the market
Our main market is Australia. New emerging markets are Hong Kong, Malaysia, Indonesia & Thailand mainly through 3rd party platforms such as Groupon HK, Lazada, & Ensogo etc.
In 2015, in developing the USA market & trying to give the brand more elasticity & a greater focus on health we decided to change the brand from Little Hussy to Love and Health. We believed this was an important factor to the female consumer we were targeting. This involved changing our URL from www.littlehussy.com to www.loveandhealth.com.au
Business Positives
When we introduced the category to the major retailers we proved the marketing strategy & product positioning was correct, with the first year achieving strong sales
Unfortunately the retailers saw this new category as easy profits & against market research & our advice rapidly expanded their suppliers & product range & promoted a wide & often distasteful product offering which lead to customer complaints & category issues, ultimately leading to reduced activity
Our market & brand positioning is validated by other new multinational brands entering the market such as Honey Birdette eBoutique who have adopted a similar strategy but with a bricks & mortar/ online e-Commerce approach
While eCommerce has been our achilles heel, the highlight was Financial year 2012-/13
Traffic peeked in March 2013 with 33,100 visitors
Conversion rate average was 2.49%
Revenue was AU$160k
Average transaction value was $41
Key customers are set up and trading. Groupon Australia/ New Zealand. Catch of the Day. OurDeals.com.au. MyDeals.com.au. Groupon Hong Kong. Ensogo Asia. Lazada Malaysia, Indonesia & Thailand.
Business Upside
Our background is FMCG & traditional bricks & mortar retail. Due to a lack of internet marketing & eCommerce skills & experience we have been unable to make the eCommerce model work
An opportunity exists for an experienced eCommerce/ Internet marketing business/ person to take over an established business structure & eCommerce business
The business foundations are in place which would allow an experienced eCommerce/ Internet marketing business/ person to step in & immediately focus on increasing traffic and sales
Singapore & emerging Asian markets although smaller then western markets will continue to grow & the Love and Health brand is well positioned to take advantage of this growth
What is for Sale
USD$90,000 for the business
Stock at cost, approximately US$70,000 (valued at point of sale)
Infrastructure
Brands - Little Hussy | Love & Play | Love and Health
High quality & reliable manufacturing factory for our own branded adult toy SKU’s, based in China
Relationship & account with Asian distributor for third party high premium branded toys for category extensions, based in Hong Kong
Relationship with reliable & quality Apparel supplier, based in China
Third party warehouse facility that manages our inventory & distribution, based in Hong Kong
A global distribution network which can manage bulk freight or door to door deliveries
In house brands which have established product packaging & sales include Love and Health, Little Hussy & Love and Play
Database 41,275 live email addresses
Facebook followers 12,784
87 SKU’s under our own brands
1,680 SKU’s under third party brands
eCommerce website built on Magento platform (Community)
Xero Accounting
Two staff: E-commerce manager - full time position | Accountants & Administration - 1 day per week
Company and Business (company is optional)
Singapore