This week, I’m taking stock of the new beauty brands launching on Amazon and the partner making it possible.
From TikTok to shoppable livestreams to its salon foray, Amazon has been luring beauty shoppers and brands from their typical outlets throughout the pandemic. With the onset of Covid-19 and the long-lasting store closures that followed, Amazon’s essential proposition made it unavoidable for beauty holdouts to ignore. According to a report from Edge by Ascential’s market research arm, Retail Insight, Amazon is set to overtake Walmart as the largest retailer in the U.S. by 2025, with $631.6 billion GMV.
While the concept of “luxury beauty” has changed because of the global health crisis, beauty brands still seek curation. Buzzy clean brands like Ilia Beauty, True Botanicals, Corpus Naturals, Loli Beauty and Exa Beauty by Credo turned to beauty and wellness Amazon partner Carbon Beauty to manage their presences on the platform last year, while Clé de Peau and RéVive went the Amazon Luxury Stores route. Now, Chinese platform expert Superordinary is hoping to bring its learnings from Tmall, Little Red Book and Taobao to Amazon.
Known for launching brands like Drunk Elephant, Farmacy and Filipino beauty brand Sunnies Face in China, Superordinary is debuting a U.S.-centric strategy this month. First, it is acting as a 3PL partner on Amazon for beauty companies like Biossance, Dr. Brandt, Joanna Vargas, Aromatherapy Associates, Archipelago Botanicals and Good Light. Julian Reis, founder and CEO of SuperOrdinary, said the company is starting with six brands and will be onboarding three to four additional brands by early fall. SuperOrdinary will be building beauty partners’ Amazon storefronts to evoke the look and feel of their respective DTC sites. Products will then be fulfilled by Amazon.
“My train of thought really started with China. There are no dot-coms in China. All business — luxury and beauty business — is taking place on platforms like Tmall or JD or Little Red Book, and even gray market channels like Taobao. We live more and more in a culture of convenience, and whether brands like it or not, they have to earn their presence where demand is. Here, it’s on Amazon,” said Reis.
Reis said brands that partner with SuperOrdinary to sell on Amazon can expect a 40% sales growth in the first year. Superordinary itself saw a 376% annual revenue spike between 2019 and 2020, bringing in more than $90 million in revenue last year. According to previous Glossy reporting, SuperOrdinary reached $20 million in revenue in its first year and was expecting to hit $80 million to $100 million in revenue by the end of 2020.
To spur the U.S expansion, Superordinary is opening a California headquarters and has made 17 beauty hires in the states, including global president and chief brand officer Maureen Case, formerly of Augustinus Bader, Violet Grey and Estée Lauder Companies. The company has more than 250 employees globally. Superordinary is also building out its investment and acquisition strategy; it recently made minority investments in Violette, the new brand from makeup artist Violette Serrat, as well as Good Light.
Case said that, even within Luxury Stores, Amazon still is not seen as a brand-building environment for beauty. “If you look at department stores or Sephora, where beauty has been sold, the proposition was always about service and brand image with the product. Brands still feel like they are negating everything that they’re asking their retail partners for if they throw themselves on Amazon,” she said.
But Reis believes Superordinary’s reputation as a protector of brand image in China will be enticing for beauty partners. John Melo, director, president and CEO of Amyris, was one who was impressed with Reis’ diligence in China.
“I’ve been a bit skeptical of Amazon, mainly because I don’t want my business taken away by Amazon,” he said. “I wanted someone who had the capability to build our brands, but not cannibalize our DTC business.”
Melo said that Biossance is the first of its portfolio brands to launch on Amazon with Superordinary, but he expects to launch others, including its Gen-Z-focused brand EcoFabulos that it acquired in April. Over the last two years, Amyris has been “working on and off” with Amazon to decide how to best to play on the platform, he said. It went direct with its Purecane brand, a zero-calorie, natural sweetener, and it used another undisclosed platform player for Biossance. “I wasn’t happy. I wasn’t seeing the investment,” he said. In 2020, Biossance saw its retail-to-DTC sales split reverse: Seventy percent of sales came from its online site and 30% from retail doors, which was the opposite in 2019.
“We’re going to settle at somewhere around 50-60% of our business through direct-to-consumer channels and 40% through retail. I look at Amazon as being a complement to that and as adding incremental sales for more revenue for the company,” he said.
Case believes more indie, prestige and luxury beauty brands will make their way onto Amazon, as long as they have a partner to guide them. “We can’t say that the beauty consumer isn’t an Amazon customer, because they have 200 million Prime shoppers,” she said. “Brands just want the beauty expertise if they are going to take the plunge.” Both Case and Reis emphasized that Superordinary will steer clear of discounting, aside from during key sales periods, and will be a necessary force to block unauthorized sellers.
Reis feels bullish on this new endeavor, comparing Superordinary to global beauty conglomerates like LVMH. “We’ve tackled the hardest market in the world with China. We think operating on Amazon will be relatively easy for us,” he said. –Priya Rao
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