In Singapore, subscription boxes are neither dead nor alive

Image credit: leolintang / 123RF.

It was 2014. Birchbox, the American startup that gave life to the subscription box business model, had raised US$60 million, valuing it at close to half a billion dollars. With over 800,000 subscribers at that point of time, Birchbox was the darling of both the beauty and tech world.

For the uninitiated, Birchbox charges customers US$10 a month for a box of sample beauty products, which ideally inspires them to buy the full-sized equivalents over at its online store.

Already, cracks were showing in the shiny veneer Birchbox presented to the media. Customers loved not knowing what they would receive in each month’s beautifully adorned box. The other side of the coin, however, was that they were being sent items which they didn’t love that much.

Soon, the cracks gave way to a chasm of discontent. Despite subscribers indicating their preferences, mismatches continued to occur frequently, leading to situations like this:

oh look 1 of my 5 birchbox samples is a shaving cream for varicose veins. Just what I need. Thx for ignoring the profile I spent 20 min on

— Mary Elizabeth (@mary3lizabethH) July 1, 2016

Fast forward to 2016, and the beauty box company has raised just US$15 million – a far cry from its previous funding round – amidst internal issues and the rise of strong competitors such as YouTube star Michelle Phan’s Ipsy and Sephora’s Play.

Clearly, customers don’t only desire the “discovery” aspect of beauty boxes – they also want value for money. Even premium samples are just that – samples – and European competitor Glossybox managed to eat into some of Birchbox’s pie by throwing in some full-sized products.

The situation in Asia

Beauty box companies in Asia have a different set of obstacles. For example, Singaporean entrepreneur Douglas Gan arrived at a dead end with VanityTrove – which had been busy acquiring competitors across Vietnam, Thailand, and Taiwan – in 2015. As time went by, he noticed that it got harder to retain customers as they accumulated box after box.

“The problem we faced was that the beauty industry [in Asia] is very niche. While the brands look very glam, they don’t have much marketing budget to help us sustain our growth,” he explains. Douglas ended up having to provide several other services such as helping brands organize workshops and engage influencers in order to keep the business going.

Subsequently, VanityTrove pivoted to become a B2B marketing solution for beauty brands, and Douglas switched his focus to Vanitee, an Airbnb for local beauty services.

Mixing it up in Singapore

Not for Singapore

A short-term tactic