Social distancing no barrier to Indonesia’s Social Bella’s rapid growth in e-commerce and tech beauty
The domestic cosmetics market is growing in Indonesia, a country where the standard of living has greatly improved in the last decade. Social media use has spread widely, shopping via e-commerce has grown substantially, and vibrant new D2C brands have been popping up locally one after the other. Investment in startups is also thriving, particularly in the tech sector, and in the field of beauty tech, the country’s first unicorn startup is anticipated to emerge by the end of the year.
Indonesia is gaining recognition as a new beauty nation. Just its enormous population of over 270 million, the fourth largest in the world, is enough to draw interest towards its beauty market, but there are also other attractive factors. The median age of its citizens is 29, and the rapid increase in middle-income citizens has meant lifestyles have improved and domestic income has been invigorated.
The Indonesian government has, through policymaking, begun to help strengthen the international competitiveness of the country’s beauty industry. In April 2019, Indonesia’s Ministry of Industry predicted that the growth rate of its beauty industry would rise by up to 9%.
However, this year, along with the rest of the world, the spread of coronavirus has dealt a serious blow to Indonesia’s economy. Decreases in income have caused a fall in consumption, and a recession is predicted throughout 2020. This has also impacted the domestic beauty industry. Along with reduced earnings, a major factor has been consumers not needing to use makeup while in self-isolation.
On the other hand, there has been an increase in the usage of contactless modes of retail, which include sales through e-commerce and social media and online services that make personal skincare product recommendations. Such services may take root as the new normal in the lives of Indonesians.
Meanwhile, one company in Indonesia’s beauty industry is showing signs of unicorn-grade growth: Social Bella, which runs Indonesia’s largest beauty and cosmetics e-commerce site Sociolla. The company announced at the beginning of July this year that they had raised 58 million dollars in a Series E round of funding. Their ability to secure funds from investors was down to show potential growth for both during and after the pandemic.
Founded in 2015, Social Bella has seen success and rapid growth with an omnichannel strategy that encompasses an e-commerce site, online media platforms, and several brick-and-mortar stores. This year it’s predicted that across these platforms they’ll accumulate up to around 30 million users overall.
Back when Social Bella was founded, many beauty products in Indonesia were circulated through routes that didn’t involve authorized distributors and, as Chrisanti Indiana as CMO & Co-founder Social Bella recalls, “When we first launched, we wanted to open access for beauty enthusiasts to trusted, authentic beauty products, particularly the hard-to-come-by ones. It can help them avoid counterfeit products which can harm them and also not beneficial for the distributors and product owners”.
Under these circumstances, it was decided that Sociolla would only handle products that were registered and authorized to be sold by Indonesia’s National Agency of Drug and Food Control (BPOM) in order to protect consumers from harmful and illegal products. This stance was met with approval, and in 2019 Sociolla was chosen in Indonesia as “the most trusted beauty e-commerce site”.
Currently, along with the e-commerce site Sociolla and six physical stores with the same name that is located throughout Indonesia, Social Bella also runs Indonesia’s largest beauty and personal care product review site “SOCO”, the beauty and lifestyle online magazine “Beauty Journal”, and “Brand Development”, which offers a distribution service for brands. And recently, they started a new beauty and personal care e-commerce service “Lilla by Sociolla” designed for Indonesian mothers and their children.
For logging into the e-commerce site, magazine site, and the stores, users can use a common “SOCO ID”. Thanks to this unique and comprehensive O2O ecosystem, Social Bella can gain insights into users’ tastes and interests as well as market trends to offer more personalized services, improve their product lineups and create new business opportunities. This building of a system that can be utilized at any touchpoint in a timely fashion is one of the company’s hallmarks.
Social Bella’s target demographic are lovers of beauty who are digitally versed and sensitive to the latest trends and products. Over half of Sociolla’s customers are within the 15 to 25 age group. This younger generation obtains their vast beauty knowledge through the web and have high expectations of brands and retailers, and to fulfill their needs, Sociolla has a wide range of products and brands covering categories such as organic and halal and spanning both locally and globally.
Along with a substantial collection of goods, Sociolla also focuses on providing a “special experience” for users to the site. This includes not just giving discounts, but also curating their products in line with the times and the latest trends, offering exclusive products only available on Sociolla and “special gifts” that heighten the shopping experience.
For example, when widespread lockdown measures were put into place due to the coronavirus, they ran a special campaign for products that especially meet the needs of users cooped up in their homes. Along with makeup and skincare, these included products for preventing infection, such as liquid soaps, sanitizers, and anti-bacterial sprays.
Indonesia’s beauty market is expected to slow down in 2020 due to the pandemic, but it’s anticipated to get back on track once the economy starts heading towards recovery. Meanwhile, under lockdown, the rate of e-commerce usage is increasing, and Social Bella has garnered record levels of organic traffic to their site as well as record average basket sizes per customer (i.e. the average number of items customers buy in one go).
Text: Ching Li Tor
Original text (Japanese 1 & 2): Tomoko Kaichi
