September 20, 2016
This is a story about something that recently happened to Russell Organics, and how we chose to do the right thing.
Our journey into China began four long years ago. What a market. China has more on-line consumers than the U.S. has people. With the help of long-term friends, we were able to establish key relationships that helped to guide us in entering this vast, yet exciting, beauty market.
Our first challenge was understanding the playing field. At that time, there were two ways to enter the market; the first being as a domestic registered company - which meant the time and cost to register the company in China and then to register our products - which meant testing on animals. The second way to enter the market was a system known as cross-border - where we could partner with distribution companies in China that would import products into a bonded (duty-free) facility and distribute to consumers from there. As we are Cruelty-Free Certified and Vegan Certified, this left us with one option, the cross-border channel. It turned out the channel was an excellent choice for Russell Organics and the revenue and number of distribution partners grew nicely.
During this growth phase, we contemplated how to someday create a mainland presence across the PRC market. The future held that China was turning out to be a very large portion of the annual revenue for the company's global efforts.
Then, in April of 2016, there were rumblings from the market about regulatory changes in the pipeline. The Russell Organics distributors advised that there may be changes, but not to worry until the actual regulatory actions were published and digested.
April 8th was the day we received a full understanding of what the new regulatory changes would mean to Russell Organics.
On that day, we were given a choice. Either register as a domestic corporation, or the products would be stopped at the border. Keeping in mind, registration would require a significant investment in fees, about 12 months to complete, and the worst part, would require that the Russell Organics products be tested on animals which the company considers barbaric.
The decision was made by CEO Richard Russell instantly. Russell Organics would withdraw from China. Period. There was no other consideration or discussion.
Instantly, four years of effort and large capital investment were rendered worthless.
The feeling of instantly losing half of your future revenue through no fault of your own is one that no business team should ever experience.
But it is at these precise moments in history when we see the true spirit and core belief of business leaders. Do they comply against their stated beliefs in the pursuit of profit, or do they stand up against the injustice and lead as a guiding light. We are proud of our decision to refuse animal testing.
To be clear, if a beauty product is now sold in China, it has been tested on animals. Some brands may not address this if asked. Others may even attempt to deny any participation. It is quite clear. Animal testing must be conducted by a state-approved laboratory. The results from the test become part of the registration approval process. Let's be real, not every brand cares about this issue, and even some of the brands that lend support to the cause have moved forward with their registration.
From our beginning, our brand has been 100% transparent. Every single ingredient is fully disclosed on our labels. We never use tricks-of-the-trade tactics of not including everything, or using ingredients names such as 'parfum' fragrance' 'blend' or 'complex' where countless chemical toxins can be hidden. We stated from the beginning that we were Cruelty Free and Vegan. Those are more than just words. They are part of who we are as a company.
Ultimately the choice of where you buy your beauty products comes down to supporting a brand that is aligned to the type of person you are; honest, courageous, a leader, committed, and of high quality. Our products are the best prestige natural products in the market. Visible results. Toxin-free.
Thank you for your support. We have so many exciting announcements coming up, we can't wait to share them.
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