China’s online beauty market is booming. Flash sale sites like Jumei and Vipshop are experiencing steady gains compared to overseas competitors, while Alibaba recently took on a 9.2% stake the US retailer Zulily.
However, for every genuine brand, there is an influx of fakes and copies. Korean beauty products have been a target for Chinese retailers and blackmarkets alike. Last month, Vipshop was accused of selling a Korean-made product that Jumei has an exclusive distribution contract on.
Taking advantage of the perceived quality-power of Korean beauty products, and their background working in cosmetic startups, Korean startup B2LINK claims to be enjoying $1 million USD in monthly sales revenue.
CEO Jaeho Lee was a co-founder at Memebox, the beauty e-commerce website that boasts a US$100 million valuation from Y Combinator, FundersClub and Winklevoss Capital. While Memebox chose to enter the U.S. market first, Lee saw the next big opportunity in the Chinese market and chose to leave the beauty giant startup and start his own business.
“Korean Brands don’t have market intelligence in China market, so we took part in the distribution side and made instant sales in China. This enabled us to attract more brands and build lower prices on the product.” Lee said.
The company aims to be a mutually beneficial ecosystem between Chinese retailers and Korean brands. Using its platform, brands can easily manage commodity prices and brand equity while Chinese B2B beauty retailers like Jumei, Vipshop, Meilishuo, Yesa and B2B2C platforms like JD.com and Tmall.hk get access to the products. Apart from these, the company operates its own beauty e-commerce platform Xinglala.
“Many people believe ample capital is vital to compete with China’s internet giants, so people laugh when a startup says it targets the e-commerce market with only capital,” Lee says. “However, if we provide a viable model for a low-cost and high quality, this strongly binds brands and Chinese retailers.”
While Memebox has established an office in Shanghai offering its cosmetic product lines, Lee looks to bring a wider range of beauty products including fashion and baby products. “We’re also developing a big data analysis algorithm for recommendation and demand forecasting for our brands.” Lee said.
As a part of D.CAMP chosen top nine ‘Geeks from Gangnam’, the team participated at TechCrunch Shanghai 2015 as well as visiting Shenzhen’s hardware companies.
Image Credit: Shutterstock, B2LINK