Shein, the fast-fashion e-tail giant on the verge of a possible London IPO, dominates in clothing – and that includes beauty.
The China-founded retailer, which was valued at $66 billion in its most recent funding round last spring and is estimated to generate about $45 billion in revenue in 2023, up from $22 billion in 2022, according to GlobalData — has slowed down. building a similar trend-driven department for color cosmetics, called SheGlam.
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Best known for his steady stream of buzzy IP collaborations and his viral Color Bloom Liquid Blush, which retails for $5.99 and is the second best-selling blush on Amazon according to Market Defense (behind Monochromatic Multi Stick by Elf Cosmetics , $5). , SheGlam debuted in 2019 through a store on the Shein website.
A standalone site was launched in December 2020, and two years later the brand added its third outlet at Amazon, where it achieved just over $2 million in sales in 2023 and is on track to reach more than $5 million this year. per Market Defense.
But Amazon appears to be by far the smallest channel for the brand, which is available online in more than 150 countries so far and is quickly betting big on physical retail.
In terms of total revenue, one source suggested that SheGlam could account for between 0.5 and 1 percent of Shein’s total revenue, which would put the brand at revenues of between $225 million and $450 million .
“Brick-and-mortar accounts for around 90 percent of the market share of many color cosmetics brands, so if we want to achieve more growth and achieve our goal of connecting with a larger community – that’s where we need to be ,” said Tony Li, who joined SheGlam in March as vice president and general manager. He declined to comment on sales figures. He previously held senior marketing positions at Youth to the People, JVN and Elf Beauty.
After notable collaborations with Mawarid Trading Ltd. and Lifestyle at Centrepoint last year, SheGlam made its physical foray into the Mall of the Emirates in the UAE in November 2023, where it will sell at Centrepoint department store alongside brands such as NYX Professional Makeup and Maybelline. New York. Shortly after, it added the Dubai Mall and Dubai Hills, and reportedly plans to grow its footprint in the Middle East to more than 200 doors by the end of this year.
“We have become the number one brand because [beauty] sales at more than 90 percent of the stores we opened in the Middle East during our first week,” said Li.
According to Jitong Li, a beauty and fashion consultant at Euromonitor, the Middle East offers an attractive opportunity for a brand like SheGlam because “compared to Europe, the MEA mass color cosmetics market is less dominated by leading players, making it easier for new Attendees.” For example, the three largest color cosmetics companies accounted for 54 percent of the market in Western Europe, compared to 31 percent in the Middle East and North Africa.
However, Europe is a key market for Shein’s overall business – particularly France and Spain, according to Euromonitor – and because the region’s beauty market is growing faster than the apparel and footwear market (color cosmetics is expected to grow at a compound annual growth rate of 4, 7 percent). percent from 2023 to 2028, compared to 2.5 percent for the latter in the same period), it is also worth the investment by SheGlam.
In the meantime, the make-up range is focusing on Mexico and will be rolled out to all 127 doors of the Liverpool department store chain this month.
However, the brand’s path to retail in the US, which Li said is “one of our most important markets and… also the market we are investing heavily in to grow even further this year,” is less clear.
“It’s going to be a tougher hill to climb,” said Manola Soler, senior director at Alvarez & Marsal’s consumer and retail group, of SheGlam’s prospects for breaking into U.S. retail.
Overall, SheGlam has dodged criticism of unethical labor and production processes that have plagued its 2008-founded parent company since Shein went mainstream in the late 2010s. These concerns, and an overall lack of disclosure about the company’s supply chain, have been among the factors hindering Shein’s increasingly winding path to an IPO.
“Ideally, SheGlam would want to be next to an Elf in a retail scenario, but because of the gray area around Shein, many major retailers where that brand would be – Target, Walmart, Ulta Beauty – have moved away from Dat. They may not want to get involved in that,” said Jessica Ramírez, senior research analyst at Jane Hali & Associates.
However, SheGlam has made clear efforts to maintain a level of outward separation from its parent company. “Our operations are separate,” says Li, adding that “our production is fully automated, so no labor is involved – which also allows us to save on those costs.”
Although consumers can purchase SheGlam products through the Shein website, SheGlam’s standalone website and social media pages do not mention Shein. Instead, the bio of SheGlam’s TikTok page (which boasts 7.4 million followers, second in beauty to Huda Beauty’s 9.6 million) reads only “Leaping Bunny Approved, #SheGlam #SheGlamCrueltyFree.”
“That [separation] is probably intentional and beneficial, honestly, for SheGlam,” Soler said, adding that “consumer perception is hard to change, so it’s hard to balance those very fast, rock-bottom prices with, ‘Okay, how much I have to do? trust that this is good for my skin?’ Certifications, such as vegan certification, could certainly be a route.”
Data from Statista indicates that SheGlam was the number seven brand in terms of unique influencer mentions on TikTok in 2023, with mentions of 9,800 influencers. Target topped the rankings with 21,000 influencers, followed by Amazon with 18,800.
With 15,600 unique influencers, Sephora was the only beauty company to beat SheGlam on the metric.
“SheGlam is a beast on TikTok – which has enormous power, especially with younger consumers,” Ramírez said.
CreatorIQ data shows that most of SheGlam’s mentions come from tutorials and “product overview and testing videos.” Director of research and insights Alex Rawitz noted that the brand is doing particularly well when it comes to cultivating long-term relationships with creators, with 82 percent of the brand’s $42.5 million in media value earned between January and April of this years comes from retained makers. .
According to the wave, SheGlam generates an average of 22.9 million TikTok views per week – well above average in terms of beauty.
“Our goal is to be a global, inclusive brand,” says Li, based in Los Angeles, where SheGlam operates one of three offices – the others are in China and Singapore. SheGlam has roughly 150 employees worldwide, Li says, with more than 50 percent “focused on products and R&D,” while the brand’s makeup of Generation Z and women is both around 80 percent respectively.
Most of the brand’s leadership team is female, including its founder and CEO, Sylvia Fu, who, according to Li, started as an assistant to Shein’s founder and CEO, Chris Xu, and created SheGlam shortly after she left the company for a short period in the company. capital.
While Li did not comment on immediate plans to expand into skin care or adjacent makeup categories, he said, “Our ultimate goal is to become a beauty universe for anyone looking for affordable products.”
According to Euromonitor, there are currently around 1,000 products available on sheglam.com. The brand adds three to five core products every year, and two to five new inventory units per month, including shade extensions, Li said. Collaborations, which drive much of SheGlam’s buzz and have recently included ‘Rick and Morty’, Marilyn Monroe and Harry Potter-inspired collections, also come out three to five times a year and are usually a year in the making, Li said.
Because lead times in the beauty industry are much longer than in the fashion sector, some believe this collaborative strategy allows SheGlam to remain trend-driven and maintain a steady stream of new products.
“Shein is taking what it does best and bringing it to the beauty sector,” says Renee Hartmann, managing director, councils for Coresight Research, noting that this strategy is part of what allows SheGlam to compete with the “NYXs and Revolution Beauty’s” of the world, rather than being lumped in with the beauty lines of Shein’s fast-fashion counterparts, such as H&M and Zara. “SheGlam is not just this add-on [Shein’s fashion business] – it is considered a real beauty candidate.”
For Soler, SheGlam’s collaborative strategy is reminiscent of the one that fueled the rise of ColourPop, which is similarly used in TV, film and sports-inspired collections.
“It’s a smart way to capitalize on culture,” she said. “The nice thing is these [collaborations] can be a pretty quick turnaround, especially if you don’t really change the formulation and change the packaging a little bit – that kind of thing can only take eight to twelve weeks.
While it remains to be seen what exactly a potential Shein IPO could mean for SheGlam, if it comes to fruition it would “clearly provide Shein with a lot of capital to expand – and it appears that [SheGlam] has some pretty aggressive expansion plans,” Hartmann said.
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