Female run start-ups have seized the opportunities in Australia’s “highly fragmented” online cosmetics industry. You’ve got to take risks and you’ve got to do big things and bold things.
They’re creating the products that they want to use and drumming up business on social media rather than trying to get a foothold in the traditional sales channels of department stores and pharmacies. No individual company generates more than 5 per cent of total revenue, so the industry is ripe for plucky start-ups.
Celebrity, author and blogger Zoe Foster Blake has also founded a natural skincare line, Go-To.
Evette Hess, co-founder of Poni Cosmetics, identified a gap in the market for a brow kit when she was working as a beautician.
“My customers always used to say ‘I wish I could do that at home’ and ‘Can I pack you in my bag?'”, Hess says. “When my bawas six months old I just woke up one morning and said ‘You know that brow kit I’ve been talking about for years? I’m going to do that now’.” Hess and her husband used the $100,000 they had saved to buy a home to start the business. “It was stressful, but I’m the eternal optimist,” she says. Hess started off stocking Poni’s products at the clinic she worked at and then gradually picked up other beauty clinics to supply to, while also selling online. Poni now turns over between $1 million to $2 million a year, marketing itself with cruelty free products that promise “no Ponis were harmed in making”. Canny use of social media has been “the biggest contributor” to Poni’s growth.
“I find it quite shocking that a lot of businesses don’t know the power of social media yet,” Hess says. “It’s free and you can connect with people all over the world.”
Full control online
When author, journalist, blogger and celebrity Zoë Foster Blake decided to launch an all-natural skincare brand, Go-To, last year, she decided to sell only online.
Foster Blake was the guest speaker at a recent Business Chicks lunch in Melbourne and says “the idea of a shop didn’t even enter my mind, to me it is so easy to sell online”.
“I’ve been accruing a following [online] for a while, the girls that follow me in the digital world are very happy to be there and very comfortable,” she says.
“I can write to them and engage them on the site and have fun with them and then we get to send them the products and package it so it is a beautiful customer experience and then engage with them on social media afterwards,” she says. “I love that we have full control of our experience and we don’t have a girl in a shop who has had a bad day be the caretaker of our brand”.
Foster Blake says it was a risk to start a business online in an industry where customers want to “feel it, touch it, smell it” but now with 15 staff and “rapid growth” she is happy with her strategy. “You’ve got to take risks and you’ve got to do big things and bold things,” she says.
Foster Blake says the digital revolution allows you to work from everywhere and set up a business without a shop. “Its a renaissance for entrepreneurs, everyone is an entrepreneur at the moment and everyone has an idea,” Foster Blake says. “But to have longevity I still think the idea and the product has to be really, really solid. Be specific. Just be the best at buttercream icing in Melbourne.”
Foster Blake says her background as a beauty journalist and blogger gave her the knowledge to work out the products she wanted to make, along with a “brilliant chemist” who a friend introduced her to. “Any truly good idea, there has to be a gap you are filling. If there’s a product that already exists and you are duplicating it, I don’t think you should bother.”
A lot more accessible
Joanna French, founder of Shanghai Suzy, just wanted an affordable lipstick, packaged nicely and in the latest colour. French worked in cosmetics marketing as a brand manager but says as a consumer “I wished there was something like that”. “It’s about finding your little niche,” she says. When French first launched her vegan lipstick business, Shanghai Suzy, her end goal was to get the brand stocked in pharmacies. “As soon as I launched online I had all these salons come to me and I hadn’t even thought about salons,” she says. “I looked into it and there are 30,000 salons in Australia. Going into independent salons and selling online you can just grow the business organically.” Shanghai Suzy turns over $600,000 a year and sells in more than 600 salons around the country and online. “I just placed an order for 98,000 lipsticks, it’s crazy,” French says. French uses social media and seasonal products to create interest in Shanghai Suzy’s lipsticks, with a new drop of limited edition colours every six months. “Changing our colours keeps our consumers excited,” she says.
“Consumers want something that feels a bit different and special they can post on their social media that nobody has heard of,” she says. “Social media and the internet means it costs basically nothing to market your product.” French says “anyone” can open a Shopify website and sell online. “Now a lot of those barriers have been removed, it makes it a lot more accessible.”
Read more: http://www.theage.com.au/small-business/entrepreneur/busting-into-the-beauty-industry-20151127-gl9xsb.html