Startup B2LiNK helps meet the demand for Korean cosmetics in markets around the world
In the South Korean beauty industry, a startup specializing in distribution is making a name for itself — B2LiNK, which runs the digital cosmetics distribution platform Umma. We take a look at the concept and business methods of B2LiNK, a company being touted as a “strong ally” for helping small-to-medium-sized South Korean brands expand their businesses overseas.
Supplying Korean cosmetics to 350 retailers around the world
B2LiNK is a startup that sells South Korean cosmetics to retailers overseas, and it has built up a notable reputation within the South Korean beauty industry. It was started in 2014 by CEO Lee So-Hyung, who previously worked at McKinsey & Company, and Vice-Representative Park Hyunseok, who previously worked as a publisher of a tattoo magazine and a marketer for plastic surgery clinics. The two have been nicknamed “the men selling K-Beauty” by South Korean media.
The founding members say they started the company simply with their hunch that the K-Beauty market was set for steady growth. Their company has indeed achieved such growth so far, attaining a total of 173 billion won (US$159 million) in sales as of the end of July 2020. In terms of fundraising, they have secured around 27.5 billion won (US$25.3 million) in series C funding and their shareholders include major OEM Kolmar Korea Holdings along with South Korean venture capital firms.
B2LiNK has set up offices in the US, China, and Taiwan, and as of 2020 has done business with around 350 retailers in 23 different countries. Notable clients include the major retailers of several countries: Tmall, JD.com, and Jumei.com in China, Costco in the US and Mexico, and Amazon US. Back home in the South Korean cosmetics industry, where there are many small-to-medium-sized brands, B2LiNK has built up a reputation as a company possessing a global distribution and selling network of which can be relied upon.
The South Korean media generally proposes three reasons for B2LiNK’s trailblazing success. One is the company’s “new ways of delivering and planning” that they implemented from the start.
One example of this can be seen in a cross border sales plan with China’s Jumei.com in 2015, where they succeeded in purchasing a large volume of Luribio Zombie Packs, a popular product on South Korean shopping sites. At the time, it was still the norm for cross border e-commerce sites to ship from South Korea once the product was ordered, however, B2LiNK promptly decided to store the products in bonded warehouses within China. Word got out that the company could quickly send South Korean cosmetics to consumers even if they were in China, resulting in them selling all 5,000 units within 2 minutes of releasing the product. Apparently Jumei.com immediately ordered an additional ten-fold shipment of 50,000 units.
The second reason being proposed for B2LiNK’s success is its strength in making use of digital technologies and data. In 2020 they released the digital distribution platform Umma targeting businesses. Umma is an information and ordering platform developed to allow overseas buyers and retailers to easily and quickly access details on South Korean cosmetics.
Distribution companies that had existed before B2LiNK normally take advantage of the fact that overseas buyers don’t have easy access to the information within South Korea, due to the language barrier for example, and boost their sales by bringing hot new products to areas that aren’t up-to-date with the latest in the industry. In contrast to this, B2LiNK’s business model, as embodied by Umma, has eliminated the barriers to accessing this information and has also made products easier to purchase, making the acquiring of customers more efficient. An easy-to-understand interface similar to a regular e-commerce site allows over 6,000 products to be viewed and purchased.
B2LiNK’s third strength has been their ability to use their information analysis system developed inhouse and “B2KER” API to collect information on up to 250,000 South Korean beauty products per day, as well as the latest market data from different countries and use that to form strategies and ideas for capturing overseas markets. Brands that entrust their products to B2LiNK are also able to receive marketing and distribution services that are based on this data and customized individually to them.
At the end of 2016, B2LiNK began helping K-Beauty expand into Costco in the US. At the time, B2LiNK found in the data they had collected that searches for “K-Beauty routine” were increasing. With this, they proposed to Costco a package called “K-Beauty Kit” that comprised 7 to 11 South Korean skincare products and included explanations on the way South Korean users use them. In the end, the package made over 16 billion won (US$14.4 million) in profit and even became one of Costco’s top five most popular beauty products.
Understanding market insights and judging upcoming trends
B2LiNK basically has two ways of handling products. The first is purchasing large volumes of products they judge to have potential and selling them to retailers. The second is selling South Korean brands wishing to expand overseas a package of services that include them handling everything from marketing to deliveries.
Looking at B2LiNK’s business as a whole, one can see that the company is in the process of evolving from a startup that supports the retail aspects of overseas expansion for South Korean cosmetics into a data-driven enterprise that supports marketing and physical distribution.
They decipher the state of overseas markets using data and provide insights to small-to-medium brands while also using the power of digital technology to efficiently expand their own sales channels. In March of 2020, they made use of their data analysis capabilities to launch the joint venture “Creative People” for exclusively importing popular US brands into South Korea. This initiative included partnering with “The Honest Company”, a baby and home care brand targeting parents that was started by Hollywood actress Jessica Alba, to gain the rights to exclusively import their products into South Korea.
CEO Lee So-Hyung has also reportedly said that he is interested in products of the clean movement, which include cosmetics, hinting that in the future, he has his eyes set not only on the development of overseas markets from South Korea but also on his business within the field of clean beauty.
Text: Ching Li Tor
Original text (Japanese): Jonggi HA
