Cellmid Ltd (ASX:CDY) wholly owned subsidiary Advangen International Pty Ltd has entered into an exclusive agreement with K2B Co Ltd (K2B) for the distribution of its évolis anti-ageing hair care and hair loss products in the Republic of Korea.
The agreement is a major step in delivering on the company’s Asian expansion plans, with the product launch expected in Q4 FY 2020 following registration with the Korean Ministry of Food and Drug Safety.
K2B will primarily use television shopping and e-commerce for the sale of the évolis products, consistent with Cellmid’s objective to increase its direct-to-consumer-business and customer base globally.
Cellmid chief executive officer Maria Halasz said: “K2B’s direct-to-consumer model is ideally suited the évolis products and we are excited to partner with their team in this major market for hair growth products.”
K2B, a company that specialises in marketing through television shopping with relationships in the Korean healthcare sector, has conducted research demonstrating the Korean hair-loss market valued at US$3.69 billion in 2017.
The agreement between the companies has the following key terms:
The term of the agreement will be three years, extendable by another two years subject to meeting minimum order requirements;
Minimum order requirements will begin in the first year and are expected to increase over the subsequent two years;
The company’s évolis branded Australian manufactured products for men and women are included in the agreement;
The products will be positioned in the premium category and pricing will be consistent with Australian product pricing;
Responsibility for marketing of the products within the territory falls exclusively to K2B, with a prescribed minimum advertising spend set as a percentage of the orders; and
Advangen will provide support in the form of product training, videos, imagery and assistance with generating on-brand marketing collateral.