Health & Beauty

"The Southeast Asian beauty market has great potential. It currently maintains a compound annual growth rate of about 5%, with a volume of about 35.4 billion Singapore dollars," said Yang Fan, co-founder of Singapore's daily makeup brand OSAKAKUMA. Among them, the size of the Singapore beauty market is approximately S$1.4 billion, and the subdivided daily makeup market is also S$140 million. He also pointed out that Singapore’s daily makeup market will reach S$200 million in the next two years, and he is optimistic about it. In order to better understand the beauty market in Southeast Asia, Hu Haichuan, vice president of investment from Wuyuan Capital, also shared his views.

How to sell good daily makeup products in Singapore? In June 2020, Singapore's daily makeup brand OSAKAKUMA received a $6 million Pre-A round of financing. Currently, OSAKAKUMA has opened 7 offline stores in Singapore, selected 1,000 SKUs, and promoted its peak monthly sales to 400,000 SGD.

Regarding the reasons for choosing to do daily makeup in Singapore, OSAKAKUMA co-founder Yang Fan said that for emerging markets, daily makeup brands have a long history, such as brands such as SK2 and Shiseido. In addition, daily cosmetics brands have a relatively good reputation among consumers in Singapore, and they also have quality assurance. When doing brand research, Yang Fan also found that the characteristics of daily makeup brands are functional segmentation, which is clearly different from European and American brands. "The functions of daily makeup are very subdivided. For example, there are special sleep masks or whitening products. These brands will create their own subdivisions and are not inclined to compete with all-category brands."

Yang Fan gave three suggestions on how to do a good job in the daily makeup market in Singapore:

The first is precise matching, delivering the right products to the right customers through the right channels. Opening a store in different locations in Singapore has different market performance, so it is necessary to make targeted operational adjustments. For example, in Singapore’s Bugis+ mall, the shopping population is relatively young and shopping frequency is relatively high. They like cosmeceutical products with a lower unit price; in PLQ malls, because there are office areas and high-end apartments nearby, most of the middle class and white-collar workers, they prefer High-end products with higher unit price per customer.

The second is the combination of online and offline. For beauty products, online and offline are not a black-and-white choice. The two are very complementary: online provides convenience and preferential prices, and offline pays attention to building trust and user experience. According to OSAKAKUMA's data analysis, the number of online users who made their first purchases was basically the same as the number of offline users. When the team was doing repurchase analysis, most of the users who made the second/third/fourth/purchase came from online. This shows that after users establish trust in offline stores, they will repurchase online channels. It should also be noted that the offline market in Singapore is relatively developed and the urbanization ratio is very high. Every consumer is not far from his nearest business district, and the offline business model will continue to flourish.

The third is the iteration of the product. Under the condition that the 1000 SKUs remain unchanged as a whole, OSAKAKUMA guarantees to iterate some products in two months, and then introduce some new products. The advantage of this is that on the one hand, it can ensure that the size of the offline store remains moderate, without having to pay a large amount of store maintenance costs, on the other hand, it ensures that users can find suitable products after walking around the store.

In addition, localization is also a point emphasized by Yang Fan. In addition to relying on front-line sales staff and data analysis to gain an in-depth understanding of local customers and products, Yang Fan believes that it is necessary to work closely with the local community. “China’s Internet celebrity delivery mechanism is very complete, but Singapore does not. Therefore, the local community is a very important private domain traffic.” OSAKAKUMA cooperates with KOLs on local social media to create its own on Instagram, Facebook and other channels. Private domain traffic. In addition, Yang Fan believes that content is a core that drives the purchasing power of beauty, which is also the key to localization. "We found that the conversion rate of content is higher than that of hard-to-wide. Singapore does not have Xiaohongshu like China. As a buyer brand, we have the responsibility to deliver better value to customers through content."

Regarding the future development trend of the Southeast Asian beauty market, Yang Fan also made the following judgments:

1. E-commerce. From the perspective of the entire Southeast Asia, e-commerce is indispensable. Judging from the 2020 Southeast Asia Internet Economy Report released by Google, Temasek, and Bain, 12% of beauty users have shifted their buying habits from offline to online. Although Singapore is more optimistic about the online and offline markets, but for countries such as Vietnam, Indonesia, Malaysia and other countries that are not particularly high in urbanization, they are far away from nearby business districts, and e-commerce is an advantage;

2. Users pay more attention to skin care ingredients. When doing customer surveys and sales, Yang Fan found that they are increasingly paying attention to the ingredients of the product itself, such as vitamin C and amino acids.

3. Men's skin care is getting more and more attention. In the last year, Yang Fan found that the proportion of male users is increasing. Daily cosmetics brands such as POLO, SK2 and Shiseido are also launching men's skin care products, and their sales data are also improving.

Niche brands have appeared one after another. In the daily cosmetics category, niche brands have always existed, and even new brands will appear every once in a while, focusing on a specific function. OSAKAKUMA, as a collection of selected lifestyle brands, values niche brands because they can bring some fresh experiences to consumers.