How we started cosmetic business?
I am Eddy, the marketing manager of the pretty comy Indonesian area. I want to tell you secrets about cross-border e-commerce and beauty industry.
Why we break up with Focallure?
One month in 2019, in a meeting room in Guangdong, China, our boss and the boss of Focallure sat on the table.
Focallure is in Guangdong Province, just like us. Every year we buy more than RP 40 Billion products from their company and sell it to the world. We have been working together very happily for years until this conference of contract renewal. At the meeting, focallure decided that they want to increase the price.
So we broke up. A few months later, pretty comy was born.
Our company is a typical cross-border trading company in China. It is different from other trading companies in that we have more than 2,000 employees. Not many companies in this industry can afford so many employees.
Our company is particularly good at selling products in Southeast Asia and is the largest seller of shopee for many years.
Maybe you know shopee, but you won’t know us. Because we have thousands of shops, big and small, selling cheap products in almost all categories, such as clothes and data cables.
Every month we send 1 million parcels to the world, but none of the products are unique. We don't own any factory, nor do we produce products. Our products come from thousands of suppliers all over China. These suppliers not only produce for us, also for dozens of trading companies. After the products produced, they will be pasted with different brands and shipped to different trading companies. This is the cross-border e-commerce.
But not for Pretty Comy. Pretty Comy is unique.
The Sacred City for China's Trading Industry?
In September 2019, in a cosmetics factory in Chaozhou, the first string "Pretty Comy" was hot printed on a lipstick.
We sign the contract with this factory to produce Pretty Comy products, out of deep and sincere respect. This factory has its own pride, and usually they don’t welcome trading company like us. It produced for high-end brands, such as H & M, Disney.
Trading companies like us, we usually buys goods from one place, the sacred city for China's trading industry: Yiwu.
With thousands of factories lying in the same area, Yiwu produces the cheapest products in the most efficient way. It not only attracts trading companies, but many foreign brands with cheap products, such as implora.
In the price segment below RP 30.000, Yiwu products are undoubtedly successful. But if you ask them to produce lip glaze of RP60.000, they will tell you that it’s beyond their limit.
The untold secret in the cosmetics industry?
At the beginning, we were very proud that we have a good factory. Soon we discovered that this is actually our disadvantage.
At a cosmetics store on Jakarta ’s street, the owner Jim bounced off the soot and told me: “Quality? They don’t care.”
Even if we set the prices to the lowest, we cannot compete with other brands in Indonesia.
So we decide to use marketing work to win the market. But when we took the first step, we discovered that it is so expensive that production costs is not worth mentioning at all:
- RP 20 million RP to take photos for 4 products;
- RP 6 million to build an Instagram page of 3,000 followers;
- RP 4 million to let an instagram influencer with 50 thousands followers post a video for us;
The untold secret in the cosmetics industry is that marketing expenses are the main cost. If we try to sell 1 million, we have to spend 0.8 million at marketing. If the brand is new to the market, the cost doubles. When a cosmetic product has a higher price, doesn’t mean it will have a significant improvement in product quality, but usually a greater investment in marketing.
You can imagine that there are three eyeshadows:
- A: Cost RP 20.000, selling price RP 30.000
- B: Cost RP 30.000, selling price RP 60.000
- C: Cost RP 60.000, selling price RP 200.000
Production cost from A to C increases RP 40.000, but the selling price increases RP 170.000. When I first knew this fact, I was as surprised as you are now.
This is the story of Pretty Comy.
Pretty Comy tries to win your preference by quality.
But we don’t have much marketing budget to tell you about our product.
So I built a WhatsApp group to introduce you the products and turn the budget into free giveaway and endless coupons: