Is beauty subscription e-commerce Asia’s next hot trend?

Is beauty subscription e-commerce Asia’s next hot trend?

August 6, 2013

by Anh-Minh Do

It is well known that women are among the most voracious and influential online groups. They’re online more often, and they are avid purchasers. In Asia, that’s especially true with women, where female web users are making, in every country, more than 60 percent of their online purchases on fashion. That’s right, fashion dominates online spending for women. With stats like these, it’s no wonder that fashion e-commerce in general is taking off. Another specific new niche, beauty subscription e-commerce, is peeking over the horizon. Currently, we’re seeing beauty subscription e-commerce sites emerging from South Korea, where Memebox, which has just over 100,000 users, has generated up to $2 million in revenue. And those guys are headed to Thailand next. In other news, Singapore’s VanityTrove has acquired Vietnam’s Glamyboxand Taiwan’s Glossybox. In Indonesia, Lolabox and BeautyTreats are battling it out with new entrant VanityTrove. In China, there’s MyLuxBox with over 10,000 paying subscribers. In other words, beauty subscription is a huge regional trend, chasing after female e-shoppers.

Although we’re only seeing this in the early stages, with each startup only clocking in users in the tens of thousands, it’s clear that investors and entrepreneurs are keen on this being a solid trend. With revenues like what Memebox has posted and a similar business model across the board, beauty subcom here to stay.

Why does it work

Clearly, this is an indication of the strength of the female online community. But ultimately, it shows the power of the subcom model. Users pay a monthly or annual fee to get surprised by beauty products. The startup gets paid upfront – plus some kickback from make-up and skincare brands – and can cut costs for customers while adding value in the form of product discovery. Is it foreseeable that we’ll see this model applied to other areas of e-commerce as well? There’s already hints of it with toys and candy. Currently general e-commerce is getting quite boring, and unique e-commerce models are exactly what the market needs for differentiation.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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