Building a marketplace startup is no easy feat but once businesses like eBay, Etsy, AirBnB, Uber and Amazon have already shown how successful you can become on a worldwide scale, you can confidently start your own marketplace if it’s the right thing for you.
Marketplaces hold a lot of power as businesses on both the supply and demand level. These websites often offer great value to customers and help smaller, niche businesses grow and expand their profits in a way that wouldn’t have been possible without such online exposure.
In the case of beauty and cosmetics, the market is an extremely crowded one, with big corporations monopolizing the multi-billion global market.
According to the 2012 report by Michelle Yeomans, “Global Beauty Care Products Industry 2012-2017: Trends, Profits, and Forecast Analysis”, the global beauty market is set to reach a mind-boggling $217 billion by 2017, benefiting from terrific growth in developing countries. Beauty tech companies are also seeing significant attention from investors.
Beauty startups make sense for personalizing beauty to one’s individual skin tones, allergies, schedules and tastes – with technology. Empowering the consumer is an appealing business approach, and one that may prove popular in this increasingly saturated market.
Companies like Julep, a nail polish mail-order service that has raised more than $50 million in the past, and Birchbox, a New York-based monthly cosmetics service that has already raised close to $72 million, have pulled in big bucks to help them change the way people buy and discover beauty products.
A few recent successes around the world have demonstrated that there is also room for newcomers and innovation in the beauty business, and the internet is actually proving to be their best ally.
With the world’s largest startup incubator of La Halle Fressynet set to open its doors in Paris by 2016, France is no small player when it comes to innovation and tech. Recently, it’s Zensoon, a startup founded in 2012 by two young female entrepreneurs, Mallorie Sia and Mallory Sermadiras that’s been making the headlines.
The startup that aims to become the Tripadvisor of the beauty sector also works as a booking platform, with a monthly activity rising by 30% every month. Its undeniable appeal lies in the possibility for smaller beauty professionals to reach out their customer base and directly being able to start their own activity after enrolling on a makeup or hair styling and hair removal course.
The demand is huge for this type of service, and Zensoon was just acquired by beauty and marketplace Wahanda, the current european leader in the sector founded in 2008 by Lopo Champalimaud.
Wahanda also provides a tool for consumers to book beauty appointments in thousands of locations, and its success — it’s now growing by 200% a year — has filled a gap in the market just as we thought the beauty business had seen it all.
The Zensoon buy was propelled in a domino effect fashion by Japan’s Recruit Holdings, which had acquired back in May a 70% share of Wahanda for £112.5 million (~$171m), injecting more money in the business and enabling Wahanda to pursue its incredible growth.
Previously, Recruit had acquired Germany’s Salonmeister in October 2014, and only two weeks ago it acquired Austria’s Beautycheck. The beauty business startup empire is only just getting started.