Gruhme looks to break into China
Corporate lawyer turned entrepreneur Rob Hallmark launched Gruhme back in 2013 to offer an alternative to established fragrance brands he believed had ‘sold out’ to big corporations and lost their uniqueness.
During the past four years, Gruhme has managed to successfully expand its fragrance business across the UK, winning the eyes of the Flannels boutiques as well as securing listings with its sister brands Cruise and Van Mildert.
Now the company is getting set to break into the Far East after agreeing a partnership with a specialist Chinese distributor which devotes itself to helping British companies develop their Chinese market.
As part of the partnership, Devoch’s founder and CEO, Don Lee, who holds a masters degree in management from the University of Warwick, will take up the position as Gruhme China’s CEO.
“Don and I met through mutual contacts,” Rob said. “We met a year ago and have kept in contact ever since. There was always an interest from my side in the Chinese market but I was acutely aware that you can’t just walk into China, put up a shop and start making money.
“To meet Don, who is a Chinese national with a British education having studied at Warwickshire University, gave him lots of merit for me. He had a local Midlands establishment and many Chinese national connections which is hugely important.
“He understands the Chinese culture as it’s part of his own DNA, he hasn’t learned it or been taught it, he was brought up with it. I knew that was going to be really important. Like the British, the Chinese are very particular about their customs. To get that wrong would be a very expensive mistake and not one I could afford to make.
“Don has contacts with a major retailer in China and that cemented it for me. Suddenly I knew Don was so much more experienced in the retail world in China and knew how it worked. That company can make US$4m a day at its peak during the trading year, he sat with the right people.”
Rob is aware however that expanding into China won’t be plain sailing and is well prepared for the task ahead. Despite this, he is quietly confident that Gruhme will be a success.
“I think there are going to be some positives and some difficulties,” he added. “In a cultural sense for example, we know that the number 8 is considered as lucky in China and conversely the number 4 is seen as unlucky.
“Our lead product is called Gruhme number 14. It is one we’ll have to evaluate when we arrive in China. The upside to me is that the name for the product might be unlucky for a Chinese brand but it might be forgiven by our Britishness. We’re not saying ‘lets call it Number 8 for the sake of sales’, it shows our British heritage and that’s the key selling point here.
“Our Britishness we expect will really help us sell our products in China. I think it’ll have far more weight in the Chinese market than it will in our domestic market to be honest. They are still very taken with Western quality, culture and approach to brands and products. In the UK I think our Britishness makes it a little less exotic to some people.”
Gruhme is also expecting its recent collaboration with iconic Midlands brand Morgan Motors to help it as it expands into the Far East. Morgan is the UK’s last remaining family owned, independent, British motor manufacturer which can trace its Malvern roots back to 1909.
The company secured a coveted partnership deal in December 2015 with the manufacturer for their first fragrance – and so is confident its brand can make a foothold in foreign markets keen to purchase a slice of true “Britishness”.
He added: “Another factor which will help us is the Morgan connection, which I think will give Gruhme huge kudos to the Chinese market. Morgan are doing quite well in Asia and if you look at Morgan they could immediately see the glamour, the Britishness and the sports car style, it’s such a quintessential British brand that people across the globe buy into. That will help us enormously when we get out there.”
When speaking of his ambitions in China, Rob said that Gruhme would look to first establish a steady presence and momentum in the Chinese market and keep the authentic British gentlemen values at core, starting from e-commerce as it did in the UK and developing to an integrated online-offline system gradually.
“It is a long-term strategy with a lot of fun at its heart”, he said with both confidence and caution in his eye, “we know it’s no good just heading to China and hoping for the best, we will be watching and learning and developing things very carefully. Each positive outcome out there will be a great win for us and give the platform for sustained, long-term growth.”
As the company continues to grow, Rob is keen on maintaining its British craft routes, saying: “I think we have to be very methodical about our resources. I want to see China and the UK really grow in a mutual way but with a careful eye on how we allocate energy, time and resources. My belief is that China will outpace the UK market but I want it to do so in an organic fashion.
“It’s not going to take a priority of resources over the UK but five years from now I imagine our Chinese market to be several times larger than the UK and to continue growing more quickly. But it is very important we maintain our British craft routes here in the UK. That’s what makes us exportable and makes our products stand out.”
As an old saying in China says, the journey of a thousand miles begins with one step, and Rob is encouraging other businesses to join him as he steps into a new journey of his own: “Following the EU referendum I genuinely think exporters are going to be reaping the benefits eventually. You have to become more open-minded about where to sell.
“Over the past few years Europe has been seen as an easy market to sell to however it was probably giving people the wrong impression of how useful it was. Very few people read and speak fluent English like the Australians and the Americans. They understand your brand better. Europe has around 27 different languages and they’re very different to British.
“In some ways, if you want to export to half a million people, it might be worth looking at Australia, Canada and the US first. Logistics isn’t much of an issue these days, it’s just as easy to head to North America as it is Central Europe.”
Published: 26 January 2017