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When you look up the definition of a unicorn you get two descriptions: “a mythical animal typically represented as a horse with a single straight horn projecting from its forehead” and “something that is highly desirable but di cult to find or obtain”.
The latter best represents the term used by the Silicon Valley to describe start-ups valued at $1 billion or more, and until recently it only applied to tech-based companies such as Uber and Airbnb. Right now there are around 300 said “unicorns” in the world and only a handful that are women-led beauty businesses. However, as the beauty market continues to grow there’s no doubt this number will rise, with experts predicting it to reach up to $750 billion by 2024.
The Huda factor
Among these mystical creatures is the Dubai-based beauty mogul Huda Kattan, who has had her makeup brand Huda Beauty valued at $1.2 billion (Dhs4.4 billion). In addition, Huda was named one of the wealthiest self-made female entrepreneurs by Forbes in 2019 and has recently launched a skincare brand Wishful. With 43.5 million followers on Instagram, the Huda Beauty brand is one of most influential players in the beauty industry today. Oklahoma-born to Iraqi parents, Kattan launched the brand in 2013 after struggling to fund the perfect false lashes in store. She gained international fame as a YouTube and Instagram influencer and now with over 140 products down the line, Huda Beauty brings in up to $400 million in annual sales.
“We’re really in awe of how far we’ve come as a brand,” Kattan tells Emirates Woman. “When I started the Huda Beauty blog ten years ago, I never imagined that we would have our own products, let alone three brands an amazing follower base. It seems surreal, especially since we started our brand not too long ago and when we began, nobody would take us seriously. I feel so proud that we’ve been able to build a worldwide business that is growing in a super competitive industry, but also that we’ve been able to create a brand that really stands for something. Each and every day is completely different, so it keeps me on my toes, but working alongside our in- credible teams – including my family – keeps me motivated to push harder every day.”
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Social media is a major player when it comes to influencing spending habits, and Kattan isn’t the only one harnessing the power of digital. Last August beauty blog-turned- cosmetics brand Glossier Inc was valued at $1.2 billion after raising $100 million from investors led by Sequoia Capital. Founder Emily Weiss worked in magazines and even starred on MTV’s reality show The Hills before launching her famous blog Into the Gloss in 2010. After achieving 10 million page views a month, and obtaining several successful corporate partnerships, she quit her day job to focus on her business. After raising $2 mil- lion, she launched the first four Glossier products: Soothing Face Mist; Priming Moisturizer; Balm Dotcom salve and Perfecting Skin Tint foundation. Thanks to its direct-to-consumer strategy, pink- and-white minimalist packaging and products that promise to “never cover you up, turn you into someone else, or overcomplicate your routine”. Glossier became an instant hit with millennials. In March last year, upon the announcement the cosmetics giant had reached the valuation of $1.2 billion, Weiss took to Instagram to reflect on the journey that led her to that moment. “Emily in 2019 has been through hell and high water to build an incredible company with incredible people, endured heartbreak and experienced new love, and been among a very small minority of women raising this kind of money at these kinds of prices, to build the things they believe in,” she said, adding the milestone the company reached meant that they get to “keep building things that make people happy”.
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Anastasia Beverly Hills is also at the forefront of this new league of entrepreneurs who are able to secure sizeable investments. Initially founded as a brow studio by Anastasia Soare in 1997, the entrepreneur felt she could do more, and in 2000 she unveiled a line of brow products. But it wasn’t until 2012 when the brand expanded into eye and lip palettes, that catapulted the company into the billion-dollar bracket. In 2018 she took an outside investment for the rst time since the inception of the company by selling minority stake to TPG Capital, at which point Anastasia Beverly Hills was valued at roughly $3 billion. It was a surprise move, but Soare wanted to reach an audience on a global scale, and she isn’t the only brand to do so.
Major companies are seeing the value investing in brands that have managed to grow an organic and loyal following. Recently Shiseido bought clean beauty brand Drunk Elephant for $845 million, after it initially being valued at around $1 billion, making it one of the biggest acquisitions ever for a skincare brand. Launched in 2013 by Tiffany Masterson, it became known as one of the pioneers of the clean beauty movement. Popular with millennials and Gen-Zers, Masterson worked with a skilled chemist to develop serums and creams without the use of essential oils, drying alcohols, silicones, chemical sunscreens, fragrances and sodium lauryl sulfate. “I think the most important element to building a successful brand is to always put the consumer first by giving them something unique and truly effective,” Masterson tells us. “My approach to developing Drunk Elephant is to think about how I would want the products I am putting on my own skin to be made; I’m always in the consumer’s shoes because I *am* the consumer. By doing this I’m never tempted to cut corners – I want the best for myself and I want people who spend their hard-earned money on my brand to get what they paid for. I firmly believe that if the products truly work, people will be happy and then will tell everyone they know. That organic word-of-mouth has been the key to Drunk Elephant’s fast rate of growth and success.”
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Focus, focus, focus
Despite the current global situation, beauty conglomerates appetite for new acquisitions isn’t wavering. Makeup artist to the stars Charlotte Tilbury has put her brand up for sale and it’s looking to fetch up to $1.2 billion. Unilever, L’Oreal, Estee Lauder, Puig, Shiseido and several private equity firms are all reportedly bidding for the brand that makes the iconic Magic Cream, as well as the celebrated Pillow Talks collection. Bloomberg notes that “a successful sale [of the Charlotte Tilbury brand] would show that large consumer companies still have an appetite to acquire independent brands despite the coronavirus pandemic, which has ended a decades-long boom in deals”. With stores all over the world, including the Middle East, Tilbury is one of the most active businesswomen in the industry who is consistently developing must-have products. “It is so important in this industry to never give up and always have self-belief,” she explains. “Keep a single-minded focus, dream big and dare to make your dreams your reality. I talk a lot about the power of visualisation too. Visualise what you want and don’t give up until you get it. You need to be professional, dedicated and hard-working to make it in the industry, but most of all you need to have fun.” Most recently she unveiled Charlotte’s Magic Serum Crystal Elixir, the first serum for the brand, and it’s already creating a buzz within for industry for its advanced anti-ageing formulation.
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What links these brands together
They create products that have a track record of doing what they promise. They all have a strong brand foundation and a unique philosophy, making them stand out from the rest. Even if some appear across major stores, they still have a platform to sell directly to consumers and put their customers first by listening to feedback. For example, Glossier products arrive in pink bubble wrap pouches, but customers felt it was wasteful to receive one each time they ordered so the brand introduced a less packaging option. Creating a loyal and engaged community is para- mount to the continued growth of any brand. Anastasia Beverly Hills had the highest-earning Instagram in 2018 according to Tribe Dynamics, which tracks impressions that can lead to online sales. The account currently boasts more than 20 million followers. Meanwhile Kylie Jenner has more than 270 million social media followers in total, with three-quarters of whom are between 18 and 34, according to Coty, who can help drive sales of her almost always sold out products.
The future is skincare?
Observing the current beauty space, and looking to Huda Kattan who has started focusing on skincare, the unicorns will no doubt continue to emerge, but maybe they will focus less on makeup and more on the natural look. According to the 2019 CivicScience survey that analysed women’s beauty habits from 2015, showed women aged 18-24 who wear makeup daily has declined from half to 38 per cent. It also revealed that percentage of Gen-Z women who never wear makeup has more than doubled from 12 per cent to 27 per cent. One thing for sure, consumers will continue to shape the beauty space, and it will take a unicorn-in-the-making to spot those trends and build the next billion-dollar empire.
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