OSIM and the use of celebrity marketing

A car is a car, and a shoe is a shoe, and for Ron Sim, founder of OSIM International, known for its extensive line of massage chairs, even a chair is a chair.

How you market that car or that shoe or that chair is what sets the product apart from its competitors.

“Marketing is about selling perspective,” he says. “If that perspective is not clear, your marketing is all going down the wrong way.”

In a speech at NUS Business School on Marketing in Asia as an Entrepreneur, Sim shared details of OSIM’s marketing and management practices.

Lifestyle brand

ronsim280During its 35-year history OSIM has grown from a local household products firm into an international lifestyle brand. Sim says the company has seen growth every year, but it hasn’t been a straight line – over the years, market conditions have pushed the company in new directions.

The first time it happened was in 1985, when recession hit Singapore. That made it clear to the young company that the small island nation had no economy of scale and, if the company wanted to grow, it would have to seek out new markets.

The first step overseas was to Hong Kong in 1986, followed by moves into Taiwan, Malaysia and China.

By the time the Asia financial crisis hit in 1997, Sim says OSIM was able weather the storm because of the strength of the brand.

You need to keep excitement coming all the time

Ron Sim,
OSIM founder and CEO

“We determined in the late 80s to create the brand. Therefore during the crisis of ’97, which was tough because the market was tough we could still grow.”

And grow they have – to more than 590 OSIM outlets in Asia, Africa, Europe and the Middle East.

But just having more stores isn’t enough – OSIM’s success has attracted a range of competitors and copiers.

Global outlook

“There’s more than ten ‘O’s’ right now,” says Sim, who created the company name by adding an “O,” symbolising a global outlook, to his name. Sim says innovation is OSIM’s best defense.

store280“In our business model we have not stopped innovations every year. In fact every year we have two blockbusters; that means two key products. And every quarter we will have a new product. You need to keep excitement coming all the time.”

Coincidentally, OSIM’s latest innovation, a massage chair called the u-Infinity, was being launched the same week Sim was speaking at NUS.

The chair allows users to download new massage programs based on occupational, sports or lifestyle needs. “CEO,” “tai tai” and “golfer” are just some of the programs available.

To market the chair, OSIM has turned once again to Hong Kong superstar Andy Lau, who has been a spokesman for the company for three years.

Prior to that, OSIM had enlisted other Hong Kong stars, like Gong Li. Sim says a company needs “a certain pocket size” to secure these celebrity endorsements, but the strategy has provided a worthwhile return on investment.

Awareness

“When we use Andy Lau it’s very, very powerful,” he says, describing the impact of Lau’s endorsement as “quite astonishing”.

“People buy not because of him alone but the awareness is big, so that’s very important.”

osimtalk280The innovation doesn’t stop at the product line, either. In fact, Sim says it’s a “key touchpoint” at the company, affecting everything from the way the products are positioned to the way they’re conceptualised and made, and even the way internal processes are organised.

“Of course we shouldn’t be complacent,” said Sim, “but I think we continue to pull ourselves away from all competition. So the forms might look alike but the substance cannot be copied.”

Not all of OSIM’s moves have gone smoothly, though. It’s 2005 acquisition of the US retailer Brookstone was, in retrospect, poorly timed. During the global financial crisis of 2008, OSIM had to take a write off of “a couple hundred million dollars” for the Brookstone deal.

Since then OSIM has become much more structured and systemised, and Sim has taken it upon himself to be more involved in the financial side of things.

“I used to be just a businessman, the CEO,” he says. “But the last eight years – now I’m 80 per cent CFO as well.”

He says the boss needs to understand every aspect and implications of the financial information “Because if the CEO does not, and totally relies on the CFO, then that connectivity to make the operating model financially effective is not there.”

More structured

Strategic MarketingIn addition to OSIM and Brookstone, the company and its subsidiaries also operate 215 GNC vitamin and supplement outlets in the region, 38 Richlife nutritional supplement stores in China, and just recently became a majority shareholder in another Singapore-based company, luxury tea brand TWG, with 16 outlets in Asia, the UK and the UAE.

As the company grows, Sim finds he’s not any busier. In fact, it’s just the opposite.

“Ten years ago or 12 years ago I got less time because I was doing everything, because it was less structured, less systemised. Today, it’s far more structured, far more systemised, I’ve got more time. Today – five, six divisions versus 12 years ago – one company.”

He also seems pretty good at delegating.

“The clarity of what you are building as a brand, as a concept, as a product innovation, as a service – you have to have clarity. If the leadership of a company has this clarity, building the processes, frankly speaking, is not difficult.”

As for the Brookstone acquisition, it doesn’t sound like he has any regrets.

“Every negativity is an opportunity to scale new heights,” he says.

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