Memebox is a relatively new face in the South Korean beauty industry which is largely dominated by cosmetics giants such as Amorepacific, Estee Lauder and MAC.
Entering a market occupied by such established corporations poses challenges for any newcomer. But Memebox saw an opportunity in what seemed an already crowded market. It jumped into the sector as a cosmetics subscription and delivery service in 2012.
|Meme Box CEO Ha Hyung-seok (Yoon Byung-chan/The Korea Herald)|
“Other cosmetic companies are good at making products. What we do better is to try to understand our customers,” said Ha Hyung-seok, CEO of Memebox, in an interview on Thursday, at the headquarters located in Pangyo Techno Valley, Seongnam, Gyeonggi Province.
In exchange for receiving free samples of cosmetics products from beauty brands to deliver them to customers, Memebox offered its partners consumer feedback. As a result, some lesser-known beauty brands became popular with consumers thanks to social media attention from Memebox subscribers.
The company no longer operates the subscription and delivery service, which ended in January 2015. It now sells thousands of cosmetic products at discounted prices on its online website, as well as developing and launching in-house beauty brands and products.
“We have evolved based on feedback from our customers. When we were delivering sample cosmetic products, we were frequently asked where to buy them and many of our customers wished that we would sell them on our website,” said Ha.
The cosmetics start-up is growing quickly, based on the online retailing platform and creating a fandom on social network sites. The company, which became the first Korean start-up to receive investment from the American seed accelerator Y Combinator in 2013, created more buzz in the start-up world for receiving $29 million from several investors, including Yahoo cofounder Jerry Yang last year. The huge investment has driven Memebox to establish offices in San Francisco, Shanghai, Hong Kong, Singapore and Taipei.
Memebox has the fastest product release cycles of any cosmetics company. To keep up with fast-changing makeup trend, it releases a new product every week.
Moreover, it is set to launch three more cosmetics brands in addition to four in-house brands in the Korean market. The company just opened the first offline store in Gangnam earlier this month and is preparing to open two more in the trendy districts of Hongdae and Sinchon this month and in August, respectively.
The decisions Ha makes are based on the analysis of the huge amount of consumer data collected from social networking sites and feedback from its customers.
“We never presume a new project will work. We have to have solid data evidence that lead us to reach the hypothesis,” said Ha.
Based on consumer data analysis, its data team runs many tests to compare different approaches in marketing or which product types would appeal to consumers in order to reach the best option in the end.
The recent findings include the facts that the current cosmetics market lacks mid-priced cosmetic products that range between 15,000 won to 20,000 won ($13-$17) and that there have not been many fast-cycle makeup products.
“Many of the existing beauty companies have concentrated on the ‘business to consumer’ model, but we are trying to do the other way around -- ‘from consumer to business,’” said Ha.
Memebox took on a new experiment this month. It opened a research and development center in the Pangyo Techno Valley, which Ha calls “Superlab,” that researches ways to make consumers participate in product-making.
By Lee Woo-young (email@example.com)