Procter & Gamble is brimming with globally marketed billion-dollar brands that you’ve probably heard of -- from laundry detergent Tide and fabric softener Downy to odor eliminator Febreze and toothpastes like Crest and Oral-B -- which posted net sales of about US$66.8 billion in over 180 countries last year.
Despite the success, the Cincinnati-based firm has constantly sought to diversify its personal care lineup in hopes of finding the next billion-dollar brand.
One of the strategies was to team up with startups from around the world via its venture capital arm P&G Ventures, which was created in 2015.
The 100-member unit helps materialize new business ideas to create new revenue avenues, often through mergers and acquisitions.
Roh Byung-kwon of P&G Corporate Ventures Group speaks during an interview with The Investor in Seoul.
Its latest hunt for promising yet qualified startups may just begin in Korea, according to Roh Byung-kwon, in charge of Asia operation at P&G Ventures who was in Korea for a weeklong trip.
“We have witnessed promising startups here dedicated to cosmetics for baby skin care, products for baby wellness, over-the-counter dietary supplements and solutions for nontoxic homes,” the 40-year-old said in a recent interview with The Investor, while declining to give more details.
But he did mention that Korean early-stage startups equipped with “irreplaceable craft” are on the verge of making deep inroads into the Chinese market through a partnership with P&G Ventures.
Formerly from P&G’s brand management team in Singapore, Japan and Korea, Roh was with P&G Ventures in Singapore before joining the Guangzhou branch in July. He and his teammates are scouting early-stage startups willing to receive investments from the firm, whose ultimate goal is to take possession of the licensing rights of products that do not exist in the current P&G lineup. Some of the key products the firm is looking for are those dedicated to personal health, male wellness, caregiving for aging consumers and nontoxic homes.
“Financial returns (from our investments) do not count, as long as we can take full control later,” he said, without elaborating of the size of funds. “We are already generating adequate returns with the existing product lineup.”
As the only non-Chinese P&G Ventures member in Guangzhou, Roh has taken on the role of looking overseas. Countries he is eying include Australia, New Zealand, the United Kingdom and Korea.
His job is to bring products into China, where the regulatory landscape is rife with uncertainties that can be eliminated or reduced by P&G’s expertise.
“(P&G) has a set of standards that we impose on our own products, (and they are) tougher than regulatory guidelines in overseas markets,” Roh said. “P&G also has expertise in big data technology, e-commerce, trademarks and media buying for marketing.”
Furthermore, P&G Ventures already has a partnership in China that helps ensure the safe landing of foreign products. One such partner is Golong, a Hangzhou-based consulting firm that distributes imported consumer goods and carries out social marketing schemes.
Roh Byung-kwon of P&G Ventures speaks during a meeting with representatives of Korean startups on Jan. 21 in Seoul.
When asked why P&G Ventures turned its attention away from Chinese startup scene to South Korea, he said the domestic market has few startups that focus on consumer goods, while the Japanese startup scene is relatively reluctant to receive investments from outsiders.
But he added that his team would zero in on Japanese startups if he fails to fund any South Korean startup.
“Neither China nor South Korea have startups making products for aging consumers, a pillar that P&G finds challenging to make a breakthrough. If we land in Japan, we would like to look for startups with solutions for sleep disorders and products targeting aging consumers,” he said.
By Son Ji-hyoung (firstname.lastname@example.org)