Global Retail   //   February 19, 2024

DTC brands look abroad for further growth

Startup brands are vying for global domination as they look for new paths of growth.

Currently, U.S.-based DTC companies like Manscaped, Pepper Bras and hair tool brand Beachwaver are all in the process of expanding internationally. For many companies, the move typically comes after gaining a following domestically, as well as big enough demand from international followers of the brand. In 2021, for example, Glossier opened a flagship store in London after years of requests from its fans across the pond.

For these young companies, global distribution is an opportunity to reach new customers coveting products from hip brands they already see on social media. A number of companies have taken an online-first approach by selling abroad through their DTC websites. Other brands are fueling their next growth phases through wholesale partnerships with foreign retailers. Not every company, however, has found success overseas — and some have discovered cross-border selling to be easier said than done.

A chance to grow a new customer base 

Typically English-speaking countries make for a natural first step for American startup brands to test — especially neighboring Canada due to its geographical proximity and cultural similarities. Moreover, Canada is known for its friendly business environment and diverse shopper demographics in cities like Toronto.

Razor brand Billie first embarked on international expansion last year starting with Canada, launching at Walmart Canada and Shoppers Drug Mart locations. For 2024, the company is planning further international expansion in still-undisclosed markets, Billie co-founder Georgina Gooley told Modern Retail late last year. “Canada won’t be the last country that we go into,” Gooley said. 

Some domestic brands are looking beyond their North American neighbor for finding new customers. Last summer, Pepper Bras, which makes bras specifically for small chests, began selling to customers in the United Kingdom and Australia. To encourage larger orders, shoppers across those countries receive free shipping on orders over $150 Australian dollars or £80 when ordering from Pepper’s site. The company, founded in 2017, now fulfills orders in Canada, the U.K. and Australia — and is set to add more markets overseas this spring, including the APAC region.

Men’s grooming startup Manscaped, founded in 2016, is taking a more rapid approach to international expansion, opting to build up its presence in new countries through multiple retail partnerships. In December, Manscaped entered its latest overseas retail partnership with Tesco in the United Kingdom, bringing its total distribution coverage to dozens of countries across Europe, Africa and Asia. The Tesco U.K. launch, which includes 337 locations and Tesco’s website, also comes on the heels of Manscaped’s Boots U.K. entry last July. The company had also launched at Tesco Ireland at the end of 2022, which marked its first European brick-and-mortar grocery partnership.

The company first began expanding its DTC presence internationally in 2020, beginning with Canada, followed by countries like Norway, Switzerland and South Africa in 2021. 

Manscaped’s vp of retail, Catherine Cronin, said the company’s early strategy stateside was primarily focused on serving a niche need: below-the-waist male grooming. Now known for products like its electric trimmer and humorous marketing tactics, the Channing Tatum-backed Manscaped has its sights on building a global presence. 

“As of 2024, we have a DTC presence in over 39 countries, and offer shipping to hundreds more via Amazon,” said Cronin. “One of our fastest-growing channels, retail, has experienced consistent growth as we continue to expand our brick-and-mortar footprint both in the U.S. and across the globe.” The company also launched in Walmart at the beginning of February. Globally, Manscaped products can now be found in Moores in Canada, Hairhouse and Woolworths in Australia, as well as Tesco, John Lewis, and Boots in both the United Kingdom and Ireland and Dis-Chem Pharmacies in South Africa.  

More wholesale retailer partnerships are expected to be added down the line. According to Cronin, “international retail growth will remain a top priority for the business as we continue to build brand awareness and gain further market globally,” along with releasing new products in other men’s grooming categories.

Global challenges

While selling to global customers can be lucrative, it also comes with its own set of hurdles. 

There are examples of brands retreating from international expansion — at least temporarily — as they work to figure out the best strategy. After being acquired last summer, underwear brand Parade is in the process of revamping its cross-border shipping strategy. According to Parade’s website, the company is currently “working on improving our experience for shoppers” in Australia, Canada, Mexico and the U.K. “If you’ve shopped Parade internationally in the past, you’ll be notified as soon as our international shipping options are available again.” The company could not be reached for comment on when it plans to resume international DTC sales.

Parade is not the only company rethinking its strategy in those regions. Adam Humphreys, partner at New York-based footwear brand Labucq, founded in 2018, told Modern Retail that on paper adding an international operation to the business seems like a no-brainer.

Labucq makes its products in Italy, so Humphreys thought that the fashion brand could more cheaply acquire customers in Europe.

However, when the company embarked on its expansion into the U.K. and Europe, Humphreys said the operation quickly became “a big headache.” 

“When you’re doing DTC you feel like you’re a citizen of the Internet,” Humphreys said. “You don’t have borders, and so logically you should be able to sell in another market easily.” But for one, cross-border tariffs and political volatility are major factors to constantly consider when expanding into foreign markets. “We thought it would be relatively easy to replicate our marketing funnels and digital presence to a U.K. audience,” he said. 

The company brought on a fulfillment partner in the U.K. in 2021, but that happened to come just as Brexit’s exporting laws went into effect, making it harder and more expensive to use the U.K. facility as a hub for European fulfillment. “We end up incurring 25% of the total sale,” Humphreys said. “So it was actually easier to ship products from Italy to [the U.S.] and back to the U.K. or Germany — another big opportunity market for us.” Finally, another challenge is that footwear in particular is a category with a high return rate, but Humphreys said brands don’t get refunded duty fees when a customer returns a product. 

“When adjusted, an EU customer has to pay about 40% more per order than someone ordering in the U.S.,” Humphreys said. Today, about 15% of Labucq’s sales come from overseas, especially from countries like Australia. For the past eight months, Labucq has been testing out Shopify Markets, the e-commerce juggernaut’s cross-border management tool. The company is sticking with charging customers $30-$40 for international shipping, instead of trying to fulfill orders within those regions. 

“It was about a $25,000 error,” Humphreys said of the U.K. experiment. “For now, it’s just not worth it.” 

For brands considering expanding internationally, Humphreys said, it may be best to test out the strategy gradually — ideally by partnering with established retailers in those markets. For instance, Labucq has been approached by a few European retailers and showrooms interested in carrying the brand’s shoes. “[Retailers] are more equipped to take on the distribution on behalf of the brand,” Humphreys said.