THE BRIDGE

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Meet the Japanese entrepreneur trying to disrupt the Thai cosmetics market

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See the original story in Japanese. Last week I had a chance to visit Bangkok on the way back from an IT conference in Phuket. And while it’s hard to focus on startups and entrepreneurships during a time of political crisis, I decided to push on and speak with some local leaders in the tech space while I was there. Thailand is, of course, a country to be reckoned with when discussing global social media trends. The market has a great impact on the industry as a whole, with the country representing the world’s second largest user base of the Line messaging app. Many foreign entrepreneurs, including Japanese ones, have launched startups right here. BuzzCommerce’s Shinsuke Wakai is one of these entrepreneurs. For over ten years, he has been working with local people and businesses in Bangkok. He launched a cosmetics-focused buzz media site called Cosmenet four years ago, and has assisted cosmetics brands from the West, Thailand, and Japan market their products among local consumers. Cosmenet is very much Thailand’s answer to @Cosme, the Japanese cosmetics online giant. Brands in the cosmetics industry have been heavily dependent on mass media (e.g. TV commercials and magazines) for their promotional activities….

See the original story in Japanese.

Last week I had a chance to visit Bangkok on the way back from an IT conference in Phuket. And while it’s hard to focus on startups and entrepreneurships during a time of political crisis, I decided to push on and speak with some local leaders in the tech space while I was there. Thailand is, of course, a country to be reckoned with when discussing global social media trends. The market has a great impact on the industry as a whole, with the country representing the world’s second largest user base of the Line messaging app. Many foreign entrepreneurs, including Japanese ones, have launched startups right here. BuzzCommerce’s Shinsuke Wakai is one of these entrepreneurs.

cosmenet_screenshot
Cosmenet

For over ten years, he has been working with local people and businesses in Bangkok. He launched a cosmetics-focused buzz media site called Cosmenet four years ago, and has assisted cosmetics brands from the West, Thailand, and Japan market their products among local consumers. Cosmenet is very much Thailand’s answer to @Cosme, the Japanese cosmetics online giant.

Brands in the cosmetics industry have been heavily dependent on mass media (e.g. TV commercials and magazines) for their promotional activities. But many have turned to Cosmenet as a means to reach out to potential customers in a more efficient way. Wakai feels that a media site should provide a neutral perspective to readers, so he has refrained from selling cosmetics on Cosmenet. But since many of the products introduced on the site are difficult to purchase in the city, his team has been receiving frequent inquiries about where to buy them.

So Wakai decided to develop an e-commerce site specifically focused on selling cosmetics from outside Thailand to young local women. It’s called BuzzCommerce. When you import and sell cosmetics, you typically are required to get approval from the food and drug administration in that country — and as you might expect, that takes time. But Wakai’s partner has helped a Japanese drug store chain import products to Thailand, so she is quite good at the requisite paper work, and that has accelerated their business’s launch.

In Thailand, we’ve already seen several notable e-commerce sites like Tarad (by Rakuten) and WeLoveShopping (by Thai telco True, inspired by Tarad). However, the majority of e-commerce deals in the country are typically traded between consumers directly using Facebook or Instagram. On BuzzCommerce, whether young women take to their service will make or break the business.

The company recently raised an undisclosed sum from East Ventures, and Wakai is now completely devoted to developing the e-commerce site. If all goes as scheduled, the web version will be launched by the end of June, with mobile apps will follow in August or September.

On a related note, many of you may recall that Singapore-based cosmetics e-commerce site Luxola raised from several investors earlier this week. In the Asian region, we’ve seen many other subscription-based cosmetic e-commerce services, as well as vertical buzz sites like Fashionguide in Taiwan.

Rocket Internet had been rapidly launching e-commerce services in the Asia region, but they have no portfolio company focused on this space after they sold GlossyBox to VanityTrobe in February of last year. I understand that this left market opportunities in the cosmetics industry in the region, which perhaps leaves room for BuzzCommerce to expand business beyond from Thailand if all goes well.

Beauty products portal @Cosme is an internet mainstay among Japanese women

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There are a few major review portals in Japan that are loved by women — Cookpad (food recipes), Ozmall (beauty salons), and Tabelog (restaurants) come to mind. But when it comes to cosmetics and beauty products, @Cosme is the place to go. The review site opened way back in December of 1999 and since then it has accumulated over 10 million reviews [1]. According to Toyokeizai, the site is used by one in three women in their 20s and 30s, and over two million members write 10 million reviews monthly. Many Japanese women have an endless appetite for greater beauty, and to satisfy such women, many cosmetic brands launch new products more often than one would expect. Industry journal Syogyo announced that in the first half of year 2012, the number of newly released cosmetic products went up 3.3% compared to the same time previous year, with the number of items reaching 1849. The average price of new products was 4132 yen (or about $42). Product reviews at @Cosme are essential for these women to find best the suited products considering the number of products that are available. Users can check product reviews and rankings, ask questions about skincare and…

@cosme-top

There are a few major review portals in Japan that are loved by women — Cookpad (food recipes), Ozmall (beauty salons), and Tabelog (restaurants) come to mind. But when it comes to cosmetics and beauty products, @Cosme is the place to go. The review site opened way back in December of 1999 and since then it has accumulated over 10 million reviews [1]. According to Toyokeizai, the site is used by one in three women in their 20s and 30s, and over two million members write 10 million reviews monthly.

Many Japanese women have an endless appetite for greater beauty, and to satisfy such women, many cosmetic brands launch new products more often than one would expect. Industry journal Syogyo announced that in the first half of year 2012, the number of newly released cosmetic products went up 3.3% compared to the same time previous year, with the number of items reaching 1849. The average price of new products was 4132 yen (or about $42).

Product reviews at @Cosme are essential for these women to find best the suited products considering the number of products that are available. Users can check product reviews and rankings, ask questions about skincare and makeup, and even find out where products are available offline. The site is free to browse, but by registering as a user, you can clip or bookmark your favorite brands, reviews, or reviewers, and also send messages to other @Cosme users about products. The site’s premium users pay a monthly membership fee of 294 yen (or about $3) which entitles them to receive special coupons and or points to win promotional products.

iStyle, the company behind @Cosme, went public on the Mothers market in March of last year. The site was initially founded to accumulate purchasing data across all cosmetics makers, but the company’s co-founder explained in a Toyokeizai interview that there is a limit to CRM as it only allows brands to collect information about existing purchasers. What brands really want is data about those who did not buy their products, which is essentially unreachable since that information belongs to competitors. @Cosme have successfully built a solution for this problem.

The core business of @Cosme is advertising, which accounts for roughly 25% of its profit, with ecommerce and retail stores just behind. @Cosme have opened six retail stores in popular locations such as Shinjuku and Ikebukuro to further engage consumers offline and online purchasing behaviors. Women can see the latest popular products on @Cosme, and visit the retails store to try them out and hopefully purchase them. @Cosme is very powerful in influencing purchasing decisions of beauty conscious consumers — so much so, in fact, that it is not uncommon to find products with things like “Chosen No.1 at @Cosme” on its package.

@cosmestore-Shinjuku

I myself do check out reviews on @Cosme when I’m deciding to try a new product. But I might not have anything in common with the reviewer in regard to skin type or preferred products. The site would be more fun and convincing if they tagged with products like Beautecam, allowing users to get connected with people having similar skin and beauty concerns.


  1. As of August of last year.  ↩