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Building a Beauty Brand Online

By: Herman Chein
Posted: January 31, 2012, from the January 2012 issue of GCI Magazine.

page 3 of 5

Many businesses across industries have grown by developing their presence and business through the Internet, but is it possible to grow a beauty brand to a significant scale internationally online? Based on the research UNT Skincare compiled, yes. In general, female shoppers’ online spend preferences and habits are similar to those in brick-and-mortar shops—clothing, accessories and cosmetics are the top shopping categories. And in the virtual stores, they remain the strongest categories. Market research also demonstrates the growth potential and the propensity for women who search for beauty products online to also make their purchases online (going beyond using the Internet as simply a research tool).

With large global brands primarily invested in traditional brick-and-mortar retail channels, the online beauty market is fragmented with small companies. And because there is no dominant player, it is full of potential for new players. Although no small or indie brands have captured a significant market through Internet sales and marketing strategies alone, that may change in the near future—and at manageable costs.

As an example, UNT Skincare develops cosmeceuticals and markets and sells directly to consumers. Based in Taiwan, the company sources everything directly from suppliers and operates its own primary sales channel, www.shopunt.com. Eliminating middle players in the value chain and operating a direct sales model has created a lean cost model for the company. It enables UNT to offer cosmeceuticals at mass market prices in 97 countries. In terms of market opportunity, it is worth noting that the top 20 international beauty companies sell 84% of their cosmeceuticals through brick-and-mortar channels such as clinics, pharmacies and department stores. That has often kept effective skin care a luxury for many consumers.

In this effort, five critical factors in building a successful online beauty brand have been identified:

  1. Engage the end-user emotionally;
  2. Gain end-users’ trust;
  3. Provide quick-to-respond interactive services;
  4. Integrate a global payment solution;
  5. Continually draw learning from information collected from advertising campaigns and from the use of the website.

We have learned that companies have to do all of them well in order to succeed in a long-term.

Interactive Services: A Case