Asia's tryst with beauty subscription boxes
Originally published in TechinAsia.
After being acquired by consumer goods behemoth Unilever for a whopping $1 billion, Dollar Shave Club became the indisputable poster child of the subscription economy era. So will the next Dollar Shave Club come from Asia?
Don’t hold your breath, we say. And that’s because the original subscription box icons – the beauty boxes – have unarguably failed to take off in our part of the world. Launched with much fanfare to ride the subscription commerce wave and, of course, replicate the triumph of the wildly successful Birchbox, beauty subscription boxes have fully fizzled out in Southeast Asia.
The three leading players in Singapore – Bellabox, Little Black Beauty Box, and Vanity Trove – have all long withdrawn their beauty box offerings. The list goes on to include Lolabox from Indonesia, FabulousFinds from Malaysia, Glamabox from Hongkong, and South Korean Memebox.
The leading players in the US – Birchbox and Ipsy – boast of turnovers in excess of US$100 million. It’s lucrative business indeed. The proposition is simple: to aid exploration and discovery amongst a beauty-obsessed populace by partnering with a plethora of beauty brands ranging from multinationals to artisanal, all keen to circulate their wares to a willing audience.
Given the minimal outlay and a steady upfront stream of revenue, not surprisingly, this easy to “copy-paste” model inspired many operators in Asia. In early 2013, as many as 50 new beauty subscription box services were launched in Southeast Asia. By the second half of the year, that number dwindled to less than 20. Yet the industry continues to thrive in the West, with over 200 active beauty subscription boxes operating in today’s market.
While experts blame oversaturation, logistical challenges, and limited availability of samples, are these really the reasons behind the demise of beauty subscription boxes in Asia? Despite being a proven and wildly successful model in the West, it failed to take off in the East. Given these cross-cultural differences, we sought deeper answers.
Opening Pandora’s Box?
The single biggest reason for signing up for these boxes is the element of surprise. Curiosity about what products is going to arrive in the box next is exciting and produces an adrenaline rush. In other words, people derive positive utility from anticipation.
However, research by consumer psychologist Dr. Angela Lee at Northwestern University shows that Asian consumers tend to be more “prevention-focused” than their Western counterparts. In other words, they are cautious, risk-averse, meticulous, and take carefully considered decisions.
Hence, the very element of surprise that is a draw for women in the West, might put off Asian consumers. One may argue that all beauty boxes promise to “customize” samples according to the user’s profile, thus mitigating this risk. That said, not receiving “relevant” samples is one of the biggest cited reasons for consumers dropping out.
Brands can manage this by designing their customization tools and questionnaires in a way that reassures consumers about their utilitarian value. Further, if the subscription service regularly includes five samples, four could be predictable and safe, and only one need carry the element of surprise.
For Asian consumers, it may even be more judicious to limit the surprise to peripheral items such as the packaging of the box – and not the content themselves. For example, regular thematic variations in the packaging would be an exciting area to play with.
A playful, whimsical unboxing experience will enhance the pleasure that consumers derive from the purchase while still being assured of the utilitarian value of the samples they are paying for. Indeed, research by Dr. Kathleen Vohs at the University of Minnesota shows that rituals boost consumption and enjoyment, and consumers are less likely to defect at minor glitches in product or service delivery.
Safety in numbers
Another way to reassure risk-averse consumers is to show them how many others are following suit. Hence, once the early adopters are on board, focusing attention on the total number of subscribers or the number of samples sent out is a good strategy.
Even better, businesses and brands should try to pique consumers’ curiosity by making access exclusive. For example, Sephora’s subscription service requires potential subscribers to join a waiting list, implying that many others have already subscribed. This belief in the wisdom of crowds helps consumers justify the risk of spending on something unknown.
Don’t appeal to self-indulgence
A big part of the allure of beauty boxes is their ability to satiate the desire to self-indulge. In other words, a beauty subscription box is a “gift” for yourself. A huge body of cultural research shows that Easterners are more relational. In other words, they tend to define themselves in terms of significant others. Hence, the idea of a “self”-gift is at odds with this shared or interdependent concept of the self.
Hence, subscription box companies may be better off positioning themselves as an “aid” to help her navigate the complicated beauty industry, without breaking the bank, instead of focusing on the self-indulgence aspect. In other words, appealing to her sensibility of being a value-conscious consumer is more likely to succeed.
Appeal to #FOMO
Research shows that certain individuals are concerned about losing out on opportunities. Brands could leverage this fear of missing out (FOMO) through limited edition boxes. Highlighting the transient nature of a limited edition box is a surefire way of increasing perceived value in the eyes of a consumer.
Last but not the least, beauty, at its heart, is about play. While the convenience of having samples delivered to your doorstep may be appealing, most women cannot resist the temptation to try out new lotions, potions, and shades of cosmetics. Regular events to let the subscribers experience the sensorial aspect by touching-and-feeling the products, and meeting other subscribers will build both the business and the sense of community.
That either some enterprising individuals will pick up the baton again in Southeast Asia or that established brands like Birchbox, Ipsy, or even Play by Sephora will debut on our shores. Whatever the case, it is evident that a straight “copy-paste” of the Western strategy will not work in Asia and that respecting cultural nuances will be the key.