Glossybox, a beauty box clone by Rocket Internet, is by many metrics a wild success. The subscription commerce company recently revealed that it had shipped 2 million boxes to customers in its first 1.5 years of operations. To date, it has raised USD 72.3M from Holtzbrinck Ventures, Kinnevik and Rocket Internet itself.
Two million boxes is a whole lot of revenue. Here’s a back-of-the-envelope calculation: Assuming every subscriber has signed up for Glossybox’s recurring 3-month package for one year — the company would easily pocket an annual revenue of about USD 26M.
|What is subscription commerce?|
|A new e-commerce model where consumers typically pay subscription fees to have products sent to their doorsteps on a regular basis.|
There are a couple of catches though. First, we don’t know what Glossybox’s global operating costs and profits are. It could be that the venture is in the red since it would have pumped tons of money into global expansion just to get to its market-leading position.
Second, Glossybox has had some missteps. Namely, it entered Taiwan, Hong Kong, and Australia, only to withdraw after realizing the markets aren’t as plump as it thought they would be. Apparently, the Samwer Brothers are capable of misjudgments.
Now, Glossybox and Birchbox — the originator of the beauty box concept — aren’t the only players in town. As I’ve written in another article, beauty box clones have emerged all over Asia. Although small by comparison to the twin titans, these are still profitable and investable businesses. Birchbox could eventually became a potential acquirer in its expansion efforts, since it recently acquired Joliebox to enter the European market.
One aggressive Asian competitor is Singapore’s VanityTrove, which is currently in the midst of raising funding. Started by serial entrepreneur Douglas Gan, the subscription commerce company has grown beyond tiny Singapore market and into the region. It has gained a strong following in Thailand and also expanded into Indonesia and Malaysia, which are relatively untouched markets as far as subscription retail is concerned.
And yesterday, to mark the start of 2013, it announced its entry into Taiwan. It also unveiled a much-needed revamp of its website, designed to give off a posh look — which reflects its differentiation of offering comparatively more expensive boxes containing luxurious products.
VanityTrove clearly believes it can succeed where Glossybox failed. Either that or it is willing to pick up the fruits abandoned by Rocket Internet. Whatever the case, VanityTrove will face stiff competition in the country from Glamabox and Butybox, although the former is probably more formidable due to its regional presence, which includes Hong Kong, China, Macau, and Singapore.
While these smaller competitors do not have the deep pockets of Rocket Internet, they are also not as prone to wild misadventures in countries they would later forsake. By bootstrapping, they are forced to operate lean and generate revenue within the first months of operation, quickly taking advantage of a proven business model.
It’s the kind of business that is favored in Asia’s risk adverse investment environment. Now we’ll see if this is the year investors bite.
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