Special Report: The company’s distribution deal with premium US beauty company Teadora is perfectly aligned with its broader European strategy.

After hitting a number of key milestones in FY20, social commerce company Crowd Media (ASX:CM8) has kicked off the new financial year with more good news.

The company announced this morning that it’s signed a binding Heads of Agreement (HoA) with leading US beauty products company Teadora Inc.

Under the terms of the deal, Crowd will act as the exclusive distributor of Teadora products into all European markets, including the Amazon EU marketplace.


Revenue driver

The deal is already revenue-generative, with Crowd fostering sales of Teadora’s Lip Drops – a superfood derived from Brazilian botanicals – through the Amazon EU distribution channel.

Established in 2013, Teadora has established market share with an award-winning range of products that are recyclable, sustainably harvested and sourced in accordance with fair trade practices.

Highlighting the potential of the deal, Crowd CEO Domenic Carosa cited industry research which showed the market for organically-sourced personal care products rose above $US13 billion in 2018, and is expected to grow by around 10 per cent annually through to 2025.

Crowd said the agreed distribution margin for all products sold will be around 75 per cent, in accordance with standard industry margins for distribution and reseller channels.

The initial HoA will run for a period of six months, at which point the two sides can choose to extend the terms by mutual agreement.


Strategic direction

The latest deal provides another example of CM8’s ability to execute on the strategic vision first laid out by chairman Steven Schaperra last November.

That vision revolved around leveraging Crowd’s intellectual property as an experienced digital marketing company to target the millennial demographic in European markets, on a direct-to-consumer mode using its extensive social influencer market.

Crowd’s strategy may also benefit from broader economic tailwinds, with recent economic data showing Europe’s recovery gathered pace in July.

Unity among EU member states around a COVID-19 response plan has also helped spark a rally in the Euro, which has climbed to a multi-year against the US dollar in recent weeks.

CM8’s digital marketing knowledge allows it to target consumers through a multi-channel approach in 12 different languages.

In connection with the Teadora deal, Carosa said strong demand for cosmetics and beauty products that are ethically sourced will underpin growth.

“With Teadora we have found a strong partner to build a profitable business for Crowd in Europe,” Carosa said.

This article was developed in collaboration with Crowd Media, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.