Thai Based Premium Skincare Producer To Tap Private Equity Funding
Royal Siam Natural Health and Beauty, a Bangkok based manufacturer of high-end skincare and related health and beauty products, has opened a private placement to increase its capital base, so it may continue to fund expansion.
According to Mr Christensen, no matter how large or small a company is, the same basic dynamics exist in terms of capital efficiency. “Availability of operating capital needs to keep pace with the growth of the business. Allowing a short or longer term period of undercapitalization will inevitably constrain your ability to grow, but the converse of overcapitalization, while it’s nice to have money in the bank, can depress shareholder returns because capital is often sitting in cash rather than being deployed in a more efficient manner.”
Royal Siam’s product range consists of a core of 100% natural products, produced by hand exactly according to time-honored formulae and processes of Thai Traditional Medicine, which has accumulated a knowledge bank over more than 800 years. Added to this is a hybrid range that introduces some synthetic ingredients which the company positions as ‘best of both worlds’, an anti acne range, and an ultra-premium range of anti aging products that compete head to head with the likes of La Mer and La Prairie.
Distribution is multi channel in Thailand but predominantly online for the rest of the world.
Mr Christensen is bullish in relation to online sales and says “the key elements – a viable payments system, reliable global fulfillment and shipping capability and consumer willingness to transact online and really come together in the past 5 years, and that has made E-Commerce unstoppable”
He points to statistics which indicate at last measure 22% of global personal care lines (skincare being the largest sub-category)
He goes on to summarize more research results relating to online sales. “Personal care including cosmetics and skincare is the most popular product range purchased online, and globally a staggering 90%+ of people who have purchased products online have purchased personal care items.”
Mr Christensen believes if growth rates were considered and the socio-economic profile of online shoppers correctly factored, over the next few years between 40% - 50% of the global market for premium skincare and related products is contestable via an online distribution business model.
He is known for his views that the online distribution revolution will result in a more fundamental upheaval in the established pattern of product distribution than most people realize. “This is a truly remarkable change in the entire basis of global trade that would not have been possible at this level even five years ago; impractical ten years ago and two decades ago was only being discussed by the far-sighted and wouldn’t have been taken seriously by most in the business community” he says.
“Because we are unencumbered by legacy processes and thinking, Royal Siam has been able to create a viable and competitive unique position that resonates with and appeals to customer sentiment and we can easily and directly communicate with them distribute products to them. This is something some companies have spent decades and millions – if not billions – of dollars to achieve, and there’s a real chance they may not get the sort of ROI they were anticipating, as the value of the asset they have built up will erode as more and more consumers evade traditional brands and distribution in this new global business paradigm.”
Royal Siam has made public a summary document that outlines the industry opportunity and the strategy and achievements to date of Royal Siam, and if this appeals to potential investors the company will then send more detailed in formation on the opportunity.
Optimally we would like a small number of individual investors to partner with us in this venture,” says Mr Christensen “and if those investors had particular interests, experience or other attributes that could actually assist us, that would be even better.”
The summary document can be downloaded online from SlideShare at http://www.slideshare.net/
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