Godiva creates natural skin care products designed to treat specific skin care concerns.

Godiva will only use the best natural active ingredients in their most effective form as the principal components of their products.

Godiva will only create a product if natural active ingredients have been independently and scientifically proven to be the safest and most effective way to address the indicated skin care concern.

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Godiva, Inc.: Tracing its roots from Licorice

Godiva, Inc. is a skin care company which has pioneered the use of Licorice Extract as the main ingredient in its products.

Before the incorporation of Godiva, its sister company Chemworld became one of the largest importers of skin care ingredients in the Philippines.

In 1994, Chemworld promoted Licorice Extract as the best whitening ingredient one can get from nature.

However, due to the steep cost of licorice, the major skin care companies initially approached by Chemworld veered away from--and even rejected--the licorice whitening concept.

Recognizing the vast potential of the ingredient and its proven highly-effective whitening properties, the majority owners of Chemworld formed Godiva, Inc. in 1996 to produce and market Godiva Natural Skin Care products.

The company has thus stirred the market through its natural skin care lines that have built a reputation as safe and highly-effective. Its Licorice Skin Whitening line alone showed marked effect in just a week, with dramatic improvement in eight weeks.

Coupled with extensive research inputs from laboratories of suppliers from Japan, Europe and the USA, Godiva is always on top of the most modern developments worldwide.

Godiva believes that there are no secret formulas in the skin care industry and there are no secret ingredients that are not accessible by other companies. Unlike other firms which hide their ingredients from their labels, Godiva is the only local brand that lists all ingredients on the label, offering value-for-money and high-quality natural skin care products to its valued clientele.

The Godiva business is firmly rooted on its Code of Product Ethics, as such, it believes in creating natural skin care products designed to treat specific skin care concerns, using the best natural active ingredients in their most effective form as the principal components of their products, and creating a product only if natural active ingredients have been independently and scientifically proven to be the safest and most effective way to address the indicated skin care concern.

In 2002, the company was awarded with three prestigious skin care product awards in the Philippines: the 18th Annual People's Choice Award for Best Skin Care Product, the 2002 National Consumers Excellence Award for Most Outstanding and Innovative Skin Care Product, and the Gawad Makamasa Award for Outstanding Facial Care Product.

Godiva has effectively marketed its skin care products through word-of-mouth advertising and the World Wide Web. To date, it remains steadfast in its thrust to offer only the best and safest natural skin care products to Filipinos.

The company has also successfully reached new customers from various parts of the world, including the United States, Canada, United Kingdom, Australia and Japan through its onlinestore and continues to attract more and more individuals seeking better skin care alternatives. The company now has distributors in Indonesia and the Middle East to meet the ongoing demands for its products.

Godiva is currently developing more products which ensure the same trusted, safe and effective skin care properties for its customers all over the globe . . . truly on its way to becoming a world-renowned Natural Skin Care company.

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The Godiva Story

(Speech delivered by Fred C. Reyes, President of Godiva, Inc., during the Young Entrepreneurs Convention of the University of the Philippines [UP] Circle of Entrepreneurs at the Legend Hotel, Mandaluyong City, Philippines, on March 8, 2003)

Thank you for giving me this opportunity to talk before you, a young group of people who dream of becoming multi-millionaires. One question that always comes up when I am with people like you who want to start their own business is this, "When is the right time to start a business? Or, should we even think of starting one, eh ang gulo-gulo na at may economic crisis pa sa ating bansa?" (Or, should we even think of starting one, when things are in turmoil and there is an economic crisis in the country?")

If that is also your question, let me answer you by citing my own experiences.

Before Godiva, my first venture was Chemworld.

Chemworld is the specialty chemical trading business I started in late 1985. That was just a few months before the first EDSA revolution. It was a crazy time to start a business, especially an import-dependent business, when you source dollars not from banks but from the black market. You can imagine me calling on my clients in the morning, and marching on the streets in the afternoon. What a way to start a business!

When Marcos escaped to Hawaii, and Cory was installed as President in February 1986, Chemworld's client network was in place. We experienced exponential growth afterwards.

Then we started Godiva in late 1996, a time when things looked rosy - on the surface. Suddenly, in July 1997, we were jolted by the Asian currency crisis. The peso dived from 26 to 46 against the US dollar. All our ingredients are imported so the financial crisis really hurt us. Well, Godiva not just survived the crisis. It even thrived in the aftermath. We confirmed the old belief that women would spend more to look good and feel good, especially during times of crisis. While most companies were laying off personnel, we continued to expand and hire more people.

The answer then is clear. There will always be opportunities even when there is blood on the streets. In good times and in bad, a true entrepreneur is always willing to take the risks.

Another important quality that should help entrepreneurs become successful is the ability to spot opportunities. The story of how Godiva started is a classic case of turning a problem into an opportunity.

In 1994, Chemworld was promoting licorice extract as the best whitening ingredient you can possibly get from nature. We showed the biggest skin care manufacturers how licorice is 16 times better than hydroquinone and 30 times more active than melawhite. We even commissioned a group of independent dermatologists from UP-Philippine General Hospital (PGH) to prove our claims. The clinical study showed that licorice produced significant result in as early as 7 days! Amazing! We presented the result to our prospective customers. By offering the best, we thought it will be easy to sell licorice extract to the industry giants. We were wrong. All the clients of Chemworld rejected licorice. They don't even want to tinker with it in their labs. Why? Because licorice is very expensive. It costs one million pesos per kilo at today's depreciated peso. Compare that to hydroquinone which is only P 300.00 per kg. They all said, the Philippines is not ready for such kind of ingredient.

Meantime, licorice as a highly effective and revolutionary skin-whitening ingredient was met with tremendous response by the dermatologists in Metro Manila, who learned of the result of the clinical study. Licorice made significant waves in the said sector that an impressive number of dermatologists were even knocking on our doors, asking for supply of licorice whitening cream. We obliged. We served the professional market. We can see that our product is really good by the enthusiastic response of the doctors. However, that market is very small. Sayang naman yung licorice if only the rich who can afford the dermatologists can enjoy its benefits. (It's a pity if the benefits of licorice would be available only to the rich who can afford the dermatologists.)

We know deep in our hearts that licorice for whitening has a huge business potential, in spite of its atrocious cost. With the big players rejecting licorice, the only way we can tap that huge potential is to launch our own consumer product. And Godiva was born in 1996.

Why the name Godiva? Godiva is an old English word which means Gift of God. Since our product positioning is natural skin care, we thought the name is appropriate for a product that derives its ingredients from nature. Nature is God's gift, of course. There is also the legendary Lady Godiva who rode naked on a horse to protest the increase in taxes imposed by the King of Coventry in England. The name still fits our skin care line since Lady Godiva rode au naturel. The added benefit of the brand name Godiva is that it creates the image of a beautiful goddess, an imported one at that.

That's exactly the perception when Godiva first came out on the shelves of Shoemart and Mercury Drug. That it's an imported brand. Our product packaging was unique and very professionally done. Our cost for the package design? One thousand five hundred pesos only, courtesy of Design Center of the Philippines. That we priced our products at the high end of the market also helped create the impression that Godiva is an imported brand. If I recall right, the rage of the whitening market then was Block & White lotion which was priced at P 30.00. Our whitening lotion was P 150.00, or 5 times more expensive. Of course, we cannot help it. We are using the most expensive ingredient in the world. An equivalent product from Kanebo or Christian Dior costs 10 times more than Godiva. And we use the same licorice ingredients.

By pricing our products higher than mass-marketed brands, we also got the attention of our target market. The first question we have to answer is, "Anong karapatan ng Godiva na magpresyo ng ganyan kataas?" (What right does Godiva have to price its products that high?")

The challenge then for us is to communicate well the benefits of using licorice as a whitening active. That is a big challenge since there are very few people who know what licorice is. Even the few who are familiar with licorice know the product as flavouring for gummy bear. To tell them that licorice whitens skin can only be met with incredulity. We cannot, therefore, just rely on ads as you can only say so much and, at best, just create awareness. Besides, we have very small budget for advertising. That little we had, we used on print ads in women's magazines. But we used extensively leaflets, glossy, professional, full-color leaflets which explain in detail the features and benefits of Godiva licorice skin whiteners. We decided that we need informational campaigns more than advertising campaigns.

Then we positioned promo girls in every outlet we opened. We trained them very well. We trained them not only how to sell, but also gave them intensive training on Godiva products and common skin care concerns. We did not call them promo girls. We called them skin care counselors. We did this to boost their self-esteem, for them to feel that they are not ordinary frontliners but several notches above the rest. This worked very well, especially when we introduced an incentive scheme that rewards performance over and above what is expected of them. Most of our skin care counselors get an equivalent of 15 months' pay, some as much as 18 months.

In effect, we brought our battle for the consumer's pocket away from media where we are weak, to the outlets where the buying decision is made, and where we are very strong. We took away sales from competing brands which spent millions in trimedia advertising campaigns but neglected to post their own girls in the outlets. Godiva is consistently among the top 5 skin care brands in outlets where it is available even though it has much lesser product lines than competing brands.

If you have a good product, word-of-mouth will work for you more than any ad campaign. Our market research showed that 70% of new users of Godiva bought our products because they were recommended by a friend, or a relative. How did we use this information to further boost our sales? We did extensive product sampling. We participated in special events and paid with products. We booked print ads on ex-deal basis. We sponsored movie premieres, golf tournaments, beauty contests and provided Godiva products as prizes. The multiplier effect of experiencing a really good product is simply amazing.

When we were just starting, we wanted to focus on manufacturing and marketing and just get a distribution company to handle opening of outlets, restocking, and collection. We wanted to simplify our life since we really have no in-house knowledge of these things.

We approached Metro Drug, McCondray, and some other regional distributors. They refused to take us in as their customer. Being an unknown brand with an expensive price tag, the distributors believed we were a very risky proposition.

We had no choice then but to approach directly our target outlets. We went to Mercury Drug and SM, they having the widest reach of the market. It took almost 6 months for Mercury Drug to approve us, but there was to be no central purchasing for our products. We have to go from branch to branch to beg for purchase order. We did that and all we got were a few pieces of products for an initial order from the few branches who agreed. Talo ka pa sa delivery cost. (And we ended spending even more for delivery cost.)

Sa Shoemart naman (In the case of Shoemart), they accepted Godiva provisionally at 2 La Botica outlets, in SM Sta. Mesa and SM Megamall. They said, if you make good there, we will give you more branches. It turned out that these two outlets are the worst-performing La Botica outlets. And that's where they wanted to try us.

We were beggars so we just have to accept the little windows of opportunities opened to us. What we did, we positioned our best girls at La Botica and placed roving promo girls at Mercury Drug branches. Our orders from Mercury Drug slowly increased as sales picked up. At La Botica, we surprised SM by being one of their top sellers in the two small branches. So SM gave us more branches to sell at, but not at once. It took us about a year before Godiva became available in all SM outlets.

We used our track record at SM and Mercury Drug to open other department stores and supermarkets. We focused on Metro Manila and Luzon during the first 3 years, followed by Visayas, and just 2 years ago, Mindanao. For Visayas and Mindanao, we looked for employees with supervisory potential who have been with us in Metro Manila and are willing to go back to their home province. Our "balik-probinsiya" ("back-to-the-province") program assured us that we have well-trained, loyal people in the provinces. This is important because we did not set up satellite offices in the provinces. In this age of mobile communication, we find no need for such extra expense.

As time went on, we increased our product lines by 3-5 every year. We are careful not to launch "me too" products. We want to be innovative, to be the first to come out with fresh product concepts. And we only launch new products if we are convinced that a certain natural ingredient is scientifically proven to be the best remedy for a skin care concern.

So from licorice skin whiteners, we have the time-released fruit acid for anti-aging, followed by green tea sunblock with transparent zinc oxide. Our latest products are the licorice anti-blemish line for acne-prone skin, and the firming cream with Actifirm. More exciting new products are in the pipeline that will surprise the market.

We are also now exporting Godiva through our onlinestore, www.i-godiva.com. Most of our clients there are Americans, some from Canada, Britain, Australia and Japan. We have started to appoint exclusive distributors, such as in Indonesia.

The rewards come not just in financial form, but also in terms of recognition of Godiva as the "best skin care brand" in 2002 given by 3 consumer groups.

It is very tempting to take personal glory for the accomplishments of Godiva after going through such difficulties. However, the very meaning of Godiva that of Gift of God, is a constant reminder that whatever success we may have achieved, it's because God gave us those blessings and not because we are good. We are just stewards of God's blessings on this earth.

My final words to you are these: As an entrepreneur, you will encounter many problems and difficulties, especially at the start. That's why you have to love your business concept with a passion. This passion will help sustain you. It will keep you going. Just be confident. Believe in yourself. And believe that when you do your best, God will take care of the rest.

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