#edGY: What happened to beauty boxes

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BACK in 2012, Malaysia’s beauty consumers were introduced to a new way to try products before buying.

For a monthly subscription fee of RM19 to RM50, a box of surprise samples would be sent — beautifully packaged and finished with a ribbon — directly to your home.

There were close to 10 beauty box companies operating in Malaysia at the height of the e-commerce trend.

By then, beauty boxes were already a roaring success in the US, where brands were looking to reach customers in a US$6.4 billion beauty and personal care market in 2012. It was lucrative yet extremely saturated.

Early players such as New York-based pioneer Birchbox and Rocket Internet’s Glossybox quickly gained traction among consumers in the US.

In Malaysia, the business model was well received in the early days. Different companies experimented with different business models, such as offering sample sizes or full sizes of products.

But two years on, the challenges of managing demand and supply have made such a business model untenable. The consumer market here is also very different from that in the US.

When #edGY went looking for local beauty box subscription providers for this story, we found that most were no longer in business. One casualty was MIVVA Box.

Founder Michelle Kong sought to replicate the subscription model here in December 2012. Initial research yielded plenty of interest but she quickly discovered that Malaysia is a different market.

To begin with, it is smaller, which means  that there aren’t many authorised distributors operating locally.

“We were all going for the same few beauty brands, which have a limited marketing budget, and we were all on a monthly deadline,” says Kong.

MIVVA also faced the added challenge of matching targeted products with subscribers based on their profile, a feature it offered.

Eventually, it went from a monthly subscription to bimonthly, and then switched to an online beauty retail model before closing its site for good.

Major US and European players such as Birchbox and Glossybox are still going strong, expanding internationally and offering more selections. Meanwhile, Malaysian beauty boxes have all but died out, save for a few players that have had to change their business model significantly or make tweaks to strengthen their operations.

At present, there are two — Modbox and Bag of Love — that are still soldiering on.

Modbox, however, is facing a major mismatch between supply and demand.

Leelee Chan, founder of Modbox, says many people are interested in subscribing. “However, initially many beauty brands were adopting a wait-and-see approach, which resulted in a supply gap for us.”

Beauty brands still lack faith in e-commerce, preferring traditional marketing methods such as print advertising and roadshows.

However, Chan is starting to see more brands consider beauty boxes as a viable alternative marketing channel.

Bag of Love by Mi Mi Teh, a former beauty writer, has switched to a bimonthly model.

Even with the cheapest box at RM19 two years ago, Modbox has had to switch from a surprise box concept to a selection-based model.

For RM9, excluding shipping costs, subscribers can pick three products to try every month. This, Chan says, has helped ease inventory management, eliminating the problem of matching inventory quantities and timing.

As for repeat sales of full-sized products, she says some brands only allow Modbox to share a referral link back to their own sites when customers make enquiries.

For now, it seems unlikely that beauty boxes will make a comeback in Malaysia.

Read more here

This article first appeared in #edGY, The Edge Malaysia Weekly, on February 9 - 15, 2015.