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SUPERORDINARY AMAZON FUELED US GROWTH STRATEGY

May 24, 2021 Kelly Kovack
May 24, 2021
SuperOrdinary

There are a number of businesses that have made their intent to build the next beauty strategic well known. Waldencast and Power Brands have set up SPACs, and Yasten has been on the acquisition trail. SuperOrdinary, the beauty incubator and distributor based in Shanghai, has its own platform-based strategy that they believe will be the foundation of building the “industry’s most powerful conglome­rate,” rivaling the likes of LVMH.

Under founder and CEO Julian Reis’ leadership, SuperOrdinary has secured its position as a gatekeeper for bringing American beauty and personal care brands to the difficult-to-permeate and highly regulated Chinese market, without compromise. Reis says “the world moves fast but we move faster.” He attributes their success to date to a very high-performance culture, strong brand-building DNA, and having skin in the game. He says they outperform their peers by putting real investment behind their brands to achieve greater returns.

SuperOrdinary reached $20 million in revenue in its first year in business and experienced a 376% annual revenue spike between 2019 and 2020, generating more than $90 million in revenue last year. The company kicked off the new year announcing a minority investment from Alliance Consumer Growth to further accelerate the growth of its portfolio of global beauty brands in the Chinese market, explore additional adjacencies to provide stewardship for brands to succeed outside of their domestic markets, look for joint venture opportunities, and develop its own brands via acquisition or incubation.

With a solid foundation in the world’s second-largest beauty market (for now), SuperOrdinary is executing on its strategy to build the next global beauty conglomerate by staking its claim to the top beauty market in the world.

“The world moves fast but we move faster.”
By Julian Reis, Founder and CEO, SuperOrdinary

Amazon Fueled US Expansion

SuperOrdinary is expanding its business model stateside by partnering with brands to help them tackle the business of beauty in the US and strategically scale in an ever-evolving digital-first marketplace, beginning with Joanna Vargas, Biossance, Dr. Brandt, Archipelago Botanicals, and Good Light. Employing a nimble approach and expertise in navigating industry regulations and consumer trends, SuperOrdinary has perfected a go-to-market toolkit, sales engine, and marketing prowess with a propensity to build brands according to its client’s global vision.

Amazon has historically been murky territory for DTC brands due to unauthorized third parties selling its products, ultimately deflecting potential sales revenue and search engine results, and damaging brand equity. The SuperOrdinary team will leverage years of distilling regulatory standards, mastering KOL marketing, and tackling Tmall in China to crack the Amazon code for its brand roster in the United States, turning obstacles into opportunity by putting the power back in the hands of brands on Amazon.

The pandemic removed the archaic and often unwritten rules that have governed distribution strategies in the beauty industry. In the “new normal,” the consumer is the only distribution channel that matters. In an increasingly digital world, agile brands are laser focused on building direct connections with the consumer and delivering seamless experiences across channels. SuperOrdinary is betting big on meeting the consumer where they are, on Amazon with one shopping cart.

With Amazon reporting 44% sales growth for Q1 and 200 million Prime members, and projected to overtake Walmart as the largest retailer in the US by 2025 with gross merchandise value sales estimated to hit $631.6 billion by 2025 and total online sales estimated to reach $1 trillion, SuperOrdinary sees working with Amazon as inevitable and is forecasting Amazon to be the largest, yet most largely overlooked, opportunity for beauty growth for years to come.

Aiming to replicate its success in China, which is grounded in a mastery of platforms like Alibaba’s Tmall, SuperOrdinary will establish a new Amazon management team that will be led by Chief Operating Officer Steve Strong and Vice President of Client Services Amanda Gordon Hinshaw. Both Strong and Hinshaw have most recently worked at Quiverr—one of Amazon’s largest third-party beauty sellers.

SuperOrdinary plans to rev up big revenue for brand partners by becoming a full-service strategic selling partner for beauty brands on Amazon, with a suite of offerings including forecasting, reporting, customer review management, brand storefronts, advertising, demand planning, custom content, and more, fulfilled from its new California headquarters. The company is starting with six brands with plans to onboard three to four additional brands by early fall. SuperOrdinary will start by building Amazon storefronts to evoke the look and feel of their brand partners’ DTC sites and orders will then be fulfilled by Amazon. SuperOrdinary believes they can help brand partners achieve 40% growth in year one.

To support its US expansion strategy, SuperOrdinary is opening a California headquarters and has made 17 hires in the States, including beauty industry veteran Maureen Case in the role of Global President and Chief Brand Officer formerly of Augustinus Bader, Violet Grey, and Estée Lauder Companies, Allie Francis, Chief Marketing Officer previously from Supergoop!, and Ralph Lauren, as well as Michael van den Berg, who will serve as Global General Counsel. The company has more than 250 employees globally. With the new US arm of the company, it will expand SuperOrdinary’s global team to 400 people by the end of year.

Platfrom Growth Strategy

Julian’s passion is discovering the small patterns that lead to big change across industries. In China, D2C websites don’t exist; all commerce is platform-based, happening on Tmall, JD, Little Red Book, or gray-market channels like Taobao. He believes this streamlined way of shopping will eventually permeate all markets: “We live more and more in a culture of convenience, and whether brands like it or not, they have to earn their presence where demand is—in the US it’s on Amazon.”

SuperOrdinary’s growth strategy is grounded in the increase of channel disinter­mediation from offline to online and strength in platforms such as Amazon. Distribution is being streamlined in response to the consumer’s growing desire for convenience.

“We know that the consumers are on these platforms, now it is our job and the brands’ job to make sure they are present on these platforms to catch that demand,” Reis said. “We believe that to truly operate on these next-generation platforms, brands need a high touch partner with sophisticated platform experience and beauty expertise to really master the intricacies of these ecosystems. This is what SuperOrdinary is building. We believe we can become the dominant beauty partner on Amazon, in China, and beyond.”

Tokopedia, considered to be the largest e-commerce marketplaces in the Indonesian region—one of the fastest-growing economies in the Southeast Asian region expected to grow $200 billion by 2025, according to a Google and Temasek report—could be next on the list of platforms to master.

New Form of Investors

SuperOrdinary is also implementing an M&A strategy of incubating, investing in, and acquiring brands to optimize marketing, infrastructure, and scale on a global level, laying the foundation to become the beauty industry’s most powerful conglomerate and official “house of global beauty.” Reis describes SuperOrdinary as patient capital agnostic in terms of the investment cycle, writing checks from $100K to $50MM taking either a minority or controlling interest.

Speaking about investment criteria, Reis said, “We look for brands that align with our values: fresh, soulful, innovative brands that can withstand the test of time and have global appeal. The beauty world is extremely saturated, so it’s crucial that our portfolio brands satisfy a need in the market and have a true point of difference.”

A key differentiating factor from an investor standpoint is their availabilty to turn on revenue immediately by putting the brand through its distribution flywheel. They are also able to provide a lot of feedback and data to inform product develop and expansion.

The business made key investments in Good Light, the new gender-fluid beauty brand by editorial luminary David Yi, and Violette FR, the new clean makeup brand by eponymous makeup artist and influencer Violette Serrat. The focus for any future deals will be in companies that are mission focused, community driven, meet the clean table stakes, have timeless innovation, and resonate with Chinese consumers.

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