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Mon, Mar 19, 2012
The Business Times
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Beauty out of the box
by Debbie Yong

It sprouted up in the United States early last year, blitzed through Europe and then spread like wild fire in neighbouring Asian market such as Hong Kong and Taiwan.

Now, the subscription-based beauty retail phenomenon has finally hit Singapore.

It works like this: For a small monthly subscription fee, women can sign up for a box containing five to 10 samples of the latest beauty products mailed to them every month.

There are now three of such services in Singapore: Bellabox, Glamabox and Vanity Trove, which charge from $15 to $28 a month.

Emily Hamilton, who runs Bellabox, the earliest beauty subscription service to set up shop here, says:

"Many women, I'm sure, have hundreds or thousands of dollars worth of beauty products hidden away in their beauty cabinet, like that $100 eye cream you only used three or four times before realising it's not quite suitable or it gives you a rash."

"That's the premise of our service. We let women try new products without the big expense."

The Australian started the business with her twin sister Sarah last October, and runs the Singapore business while Sarah runs the Australian arm.

Besides the monthly sample mail-outs, Bellabox also comprises an online store, through which full-sized items of the samples are retailed on consignment - a helpful feature given that many of Bellabox's brand partners are overseas names that are only just launching in Singapore.

Noting that beauty stores in Singapore are less inclined to give out samples as freely as in other countries, Ms Hamilton says:

"The beauty industry is all about touching and feeling the products. When people experience a brand - in the comfort of their homes rather than just on the back of their hand in a store - they will remember it more than just seeing it in an advertisement.

"Also, when you pay for something, you are a more engaged customer than if someone had given it to you for free," she adds.

For Cristina Ng, co-founder and general manager of Glamabox, going down the subscription-based retail route "made logical sense".

She explains: "With the advancement in technology and logistics, consumers now have a smarter way of making purchases. There are thousands of beauty products from around the world and it is virtually impossible to try each one to find out what really works for you."

Glamabox, therefore, touts itself as a cost-effective way for women in Asia to try out products curated by cosmetics consultants and hand-picked by Hong Kong model Lisa S, who is the brand's co-founder.

Glamabox subscribers pay $18 monthly and boxes are shipped out via registered post in the first week of each month.

Douglas Gan, who runs threemonth-old Vanity Trove, takes the element of service further by hand-delivering his parcels to subscribers.

"Women like to receive gifts, especially when there is an element of surprise involved," he explains.

Like the other two beauty boxes, each of Vanity Trove's monthly offerings revolve around themes such as whitening, detoxing or anti-ageing according to the seasonal calendar followed by women's magazines.

The items are not revealed to subscribers before delivery.

More than 70 per cent of his subscribers are over 25, and live in condominiums in the Holland and Bukit Timah areas.

At $28, Vanity Trove's monthly fees are the highest, but this is in line with their focus on mid- to high-end brands like Clinique, Dior and SKII, Mr Gan says. Each Vanity Trove package is valued at $100 to $200.

Besides the ease and convenience of transacting payments online, the e-commerce-driven business model naturally - to their advantage - lends itself to virality.

"Most of our customers are already online so when they experience a good thing, they are more inclined to tell their friends about it via their blogs, their websites and other social media networks," says Ms Hamilton.

She started out with 250 boxes in the first month - which was completely sold out - and has been seeing a 30 to 40 per cent increase in new subscribers each month.

Packages are sent out on the 10th of each month via registered mail.

Meanwhile, Vanity Trove has 3,000 subscribers currently and aims to ramp that figure up to 8,000 by June.

A fifth of its users have signed on for 13-month subscriptions. Glamabox declined to reveal membership figures.

But healthy growth numbers aside, the business is not without its challenges.

"It's such a new concept that it is hard to initially get beauty brands - especially the big players - to hand over sample products to a new company," says Ms Hamilton.

"It doesn't quite come under their advertising and promotions budget and nobody has a few thousand extra sample products sitting around, so this is something that has to be deliberately strategised."

Fortunately, increasing spotlight on established overseas beauty subscription services like Birchbox, an American start-up by two female Harvard Business School graduates that really kicked off the beauty subscription trend, and their high-profile marketing campaign tie-ups have helped to open local doors.

United Kingdom-based Glossybox, for example, just released a Harrods edition box this month.

"There is an increasing realisation among beauty brands that these campaigns do work and there is a need to budget for it," Ms Hamilton says.

Ms Hamilton notes, though, that increasing competition and the large "grey market" in Asia for excess stock of sample products have lured less responsible businesses to purchase and distribute such items without the beauty brands' knowledge.

These can lead to problems if these samples have expired or are poorly stored in improper conditions, or if rival beauty brands have their products placed in the same box - a big marketing faux pas she says.

"The subscription-based retail trend may still grow in other industries but when it comes to beauty, three's a crowd," says Mr Gan.

Businesses will have to rely on careful positioning to distinguish themselves if more entrants come onto the market, he believes.

But will it be another phenomenon like group-buying site Groupon, which spawned a thousand replica sites at the peak of its popularity last year?

"The beauty subscription business is more difficult to replicate. Group-buying sites serve local small businesses, and there is an infinite amount of them out there. But we only have a limited amount of cosmetic companies, samples and campaigns," says Ms Hamilton.

In Australia, she states as an example, there were around 10 such beauty boxes when such services were all the rage last August, but now the number is down to three, and at the end, one or two.

Still, all three services claim that expansion is on the cards. Glamabox is rapidly expanding the range stocked on their month-old online retail store while Vanity Trove plans to extend their subscription model to full-size items and hold workshops, classes and community gatherings for beauty lovers.

A men's box - which Bellabox currently offers in Australia - is in the works, as well as a showroom space for their products at Bellabox's current office in Temple Street.

"Just like how television did not replace the radio, and the Internet did not replace newspapers, the subscription-based model is merely a complement to, and not a replacement for, existing sampling platforms," says Mr Gan.

This article was first published in The Business Times.

 

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