Cellmid’s (ASX:CDY) hair loss product evolis® has just been given a direct access to the huge US market via a partnership with Colour Collective, a specialist in the launch of high end hair brands in the US, successfully launching products for Revlon, Unilever, and Toni&Guy into the US market.
Suffice to say, such a ringing endorsement is a big deal for CDY. Colour Collective is an outfit which knows the hair care market in the US like the back of their hands.
Since 2012, the group has launched 146 products into the market from nine brands.
Normally to facilitate a market entry, a company from Australia would need to set up a local sales team, set up a supply chain, and find the best channels for advertising – and that’s simplifying the process.
What the agreement with Colour Collective does is essentially supercharge CDY’s market entry by leveraging off Colour Collective’s already proven promotional and sales channels for hair products.
Colour Collective knows the market – so it makes sense that CDY lean on it for support.
It ultimately means quicker revenue generation for CDY from the US than would have otherwise been the case.
The channels Colour Collective will be pursuing include e-commerce and sampling channels for customer acquisition, establishing a presence in high-end retail stores and setting up a space on home shopping networks.
There’s a very large market opportunity here in the US.
Broadly speaking, there are two types of hair loss products:
The type you have to get a referral for and cost thousands of dollars… and the type you can buy over the counter.
The type that costs thousands of dollars is pretty good – if you have thousands of dollars.
The over-the-counter market has been bolstered by the fact that a popular treatment, minoxidil, has been off-patent for a while now.
That means that cheap generic hair loss products have been able to flood the $200 million market and now account for the bulk of it.
Here’s the rub though:
Minoxidil-based products are only really available for men
That leaves roughly 50% of the market wide open for innovative players such as CDY to come and shake up the category.
CDY can make the shake by not only appealing to women suffering hair loss or concerned about hair loss – but also providing stiff competition for minoxidil-based generics in the men’s market.
After all, if the minoxidil product doesn’t work – what’s the alternative?
evolis®.
And it is already making waves on national television.
CDY Price at posting:
2.9¢ Sentiment: Buy Disclosure: Held
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