Prices down, sales up
In July, the American Forbes published an article about how niche and of little interest to investors, the industry of sex toys for 15 years and has become a market generating $15 billion and with growth prospects up to $50 billion by 2020.
Three important milestones: in 2003, Amazon opens online Sexual Wellness shelf on which it first sold only condoms and lubricants, but will soon appear all kinds of massagers and adult toys. In 2010, cosmetics giant Reckitt Benckiser to buy the company Dure, and begins to make not only condoms and lubricants, and various devices. In 2014, research firm Kline & Company releases a multi-page analytical report on the market of goods sexual wellness products for healthy sexual life. Before consulting and marketing agencies have joined the industry of sex toys with pornography. This symbolic watershed was the final step to demarginalize the industry. The adult brands were sold in large retail chains, novelties large manufacturers gain international recognition at competitions of industrial design. For example, in 2014 intimate massager Lelo Ora picked up the award at the festival “Cannes lions” in the category “product design”.
The second driver of development has become a mass culture. The book and movie “50 shades of grey” has significantly increased the sales of toys and drew attention to the industry as a whole.
And finally, the development of technology also contributed to market growth. Played a huge role in the spread of the Internet due to which many users became available the ability to order toys and other products in online shops. The technology used in the toys, also become more and more perfect and bring together industry with other high-tech industries. The computer built into the Dildo, — are not uncommon and not a luxury. Smart toys for sex are able to simulate the motion of a beloved partner at a distance, to vibrate to the beat of the music on my iPod, to perform the functions of tracking bracelets and so on. The materials that make toys are becoming more complex, more environmentally friendly, innovative. It affects the image of the adult market in the eyes of investors. Over the last five years came on the market several high-tech brands: Crave, Womanizer, Satisfyer, Imtoy, Revel Body.
The market of sex toys in Russia, and worldwide, is growing rapidly, but so far in the other direction. Global trend — increase in sales of high-tech products include computers, complex mechanisms made of specially designed materials. We have a niche of tech products, on the contrary, is narrowed, but the growing popularity of the most simple toys for adults.
© Reuters
As the crisis has affected the retail
The volume of Russian market of adult products today is about 5.5 billion rubles a year. Sounds good, but keep in mind that the pace of growth slowed considerably in 2014, after the currency crisis. Average check result of increased cost of goods increased by about 20%, and the number of orders proportionally decreased. Toys from America and Europe has risen, not only because of the difference in exchange rates. As a result of rising demand, many of them (for example, the Swedish brand Lelo) two years ago, raised prices by almost a quarter. As a result, Russian retailers have significantly reduced purchases in the West. The question is what to fill empty shelves, the sellers decided differently. Most replaced the departed position the goods from China — there is 70% of adult toys, about a thousand factories located mainly in the provinces of Guangdong and Zhejiang are working to supply intimate massagers and other products for sex across the world. But there are other options — for example, the store Intimshop.ru launched own brand of inexpensive toys.
Intimshop.ru — the oldest in Russia, online adult store, it opened in 2000. He has one permanent owner — Denis Zheleznyak. Intimshop.ru was his first project in retail (and in General the first project). Today the company, besides online shop, has three retail outlets in Moscow. The sales volume of more than 50 million rubles a year.
“Among sex Saparov is widely believed that products in our industry, like bread, will not be sold, so sales will not grow, margins to do the maximum,” said Zheleznyak. Today’s retail price market pricing, repeat the beginning of 2000-ies. The average mark-up is 200%”. In a crisis Zheleznyak decided to experiment — the price of goods in different categories started systematically reduced. In the end it turned out that people would like to buy a lot more adult products, but not ready to pay dearly for them. “The brand Doc Johnson is the model of the strap-on Gal Pal, the price was about 1400 rubles, and we sold five of these toys in a month. And then I lowered the price to 990 rubles. And we started selling 80 pieces,” — says Denis. The obtained results have encouraged the management of the store to create a brand base toys at the lowest prices.
When choosing a production company ranged between domestic and Chinese companies, in the end the issue was pretty quickly resolved in favor of the Russian factory (the name and location of production of iron ore did not disclose). The quality of the products she was fundamentally different to the Chinese for the same price. Zheleznyak said that from the Russian supplier, the material from which made toys, much better is a private development company, not lagging in quality from the famous “cybercore” American brands. For the same money from Chinese suppliers you can buy products from a simple rubber with characteristic odor.
The project started in June of 2016. The first products of the new brand was a line of 10 dildos of different models and sizes — from the manufacturer had their own series know name models from which to choose those that, in the opinion of the management Inimshop.ru would be most in demand. To reduce prices it was decided to dispense with the packaging of toys sold in sealed shrink wrap. In the end, their prices start from 490 rubles at the 100% mark. Analogues to find similar products in other stores are from 1000 rubles.
“We thought that the audience will be filled with cheap dildos for the first couple of weeks, and it is only growing. Often people take several pieces. At the peak we sold in two days a hundred and dildos now can easily increase its sales to 100 pieces a day,” says Zheleznyak. At the moment, the store has sold hundreds of toys under its own brand. No advertising is not allowed — only the banners on the website and newsletter to regular customers. To invest in a large-scale promotion makes no sense: companies have nowhere to take more toys. Power from the manufacturer fully loaded.
“Russian developments in the adult industry at a high level, but production volumes are very small. When we ask to sell us a batch of 200 toys, in response we hear that there are only 137 and those SKUs that we would like, and others, adds iron ore. — It would seem that the supply from the region Russia needs to come quickly, but in fact you have to wait a few weeks until it will be ready we need a party.”
About increasing the amount of issue it is not, therefore, to the chagrin of the company’s management, they still have to look towards China. Work with Asian manufacturers to Denis, most likely, have — already, the demand for toys exceeds the capacity of the Russian manufacture, and the store plans to expand the range of products. “We will sell at the lowest prices of the pump and the nozzle (this is almost the most popular categories of goods, vaginal balls. The latter will cost 100-200 rubles. It’s a given that the prices of products from China will be higher due to logistics and quality control. Now there are proposals on the market just yet. Niche commodities is not filled, and there is a huge potential for growth. It’s not the fact that someone draws our brand — it’s just nobody knows. But people want to buy toys and you take what you can afford”.
© Yorgos Karahalis / Reuters
What do the manufacturers
In Russia there are three large manufacturer of adult products is the company’s Lovetoy, “Myth” and “biorhythm”. Main product categories — dildos, cosmetic products, masturbators, butt plugs, vacuum devices, extenders and prosthetic penis, sexy lingerie.
The oldest among manufacturers company Lovetoy (before it was called “A Polymer”}. Production was up and running in the Krasnodar region. Founded his medical education Vadim Eve. Bet as in the beginning of its work, and today, he’s doing more for the goods paramedical appointment — falloprotezy, spoon-erectors, paraprofes to the penis, lengthening the nozzle. Most devices of its own design company. In a month Lovetoy produces an average of 20,000 units and the company turnover is 7 million rubles per month.
Production there since 1993, and the crisis of 2014 was not the first in its history, therefore, the leadership managed to turn the situation to their advantage. “The volume of production since the beginning of 2014 we have doubled,” says Eve. — All the profits we’ve brought in current assets and due to this for two and a half years transformed the production and created a new technology for prosthetics, which is now under discussion with the Ministry of health.” The company’s turnover has increased for the categories that constitute the core of the proposals — harness, strap-ons, falloprotezy.
Russian producers the crisis has certainly benefited. But solving the main problem of the industry he was not able to do. “The fact that the country has virtually no infrastructure is needed,” says Eve. To produce electrical components such as motors for vibrators, at a competitive level simply no, because high-tech gadgets which are produced by Western companies like Fun Factory or Lelo, is waterproof, with a native application, remote control, variety of modes) are not. “Everything that we have now, we built from scratch is our own production lines, employees who were trained ourselves. In the 90s, when we started, the factories who could give orders and experts who could advise was that we started with them. Today there is no such,” adds Eve.
The demand for products Lovetoy continues to grow — they produce the inexpensive basic model toys for adults. If the situation on the currency market will not change, the company will continue to scale the Russian market of adult products finally will be in the configuration to which it is moving right now. Expensive and technologically advanced gadgets will be a lot of provided sex geeks, but budget and simple toys of domestic production will appear in most of the families in this assessment of the prospects of the market converge and manufacturers, and retailers.
Cover photo: Thomas Northcut / Getty Images
