10 days ago, one-year-old Indonesia-based beauty box service Lolabox called it quits with an announcement on its home page. “The answer is a very long story,” read the announcement.
It isn’t the first, nor will it be the last to note a shutdown of beauty box operations in Indonesia. Its predecessors include Singapore’s Vanity Trove, who pivoted to focus on being a social network for females, and local player Beauty Treats. Christian Sutardi, Co-founder, Lolabox said that he chose not to go for a pivot in beauty e-commerce as it is a “whole different game”.
In addition, it is difficult to compete with online stores, BBM groups and the surge in social commerce (Facebook, Instagram and its like). “In many cases, they offer products at a third of the official distributor’s retail price,” he said.
He told e27, “As you can imagine… there are many reasons for why we shut down.” Indeed, there was a plethora of reasons, but one stood out. Companies are not able to supply startups like Lolabox with more than 1,000 travel-sized samples every month.
“Sachets are easily available, but that’s really not what our members want,” reasoned the ex-Rocket Internet staffer. Lolabox’s shutdown will affect 7,000 subscribers. Most of these consumers do not want cheap-looking non-reusable sachets.
Aside from supply issues, beauty brands are also troubled by regulatory problems. The ability to import, certify and distribute cosmetic products in Indonesia is constantly hindered by cost and the sheer difficulty, he shared.
He said, “Well, we don’t deal with these issues. The partner brands do, but they are obstacles for the brands, resulting in a significantly smaller variety of available products.”
Furthermore, time waits for no man. “A season lasts three months,” he said, “which can be the time it takes to get a product certified.” In this case, by the time a product receives certification, no one would even want to use it anymore. While this is true for cosmetic products, skincare products get more leniency. However, Lolabox members are not too keen about skincare, said Sutardi.
“…at one point 6,000 people were on our waiting list – and not being able to satisfy it, is a retailer’s worst nightmare,” he added about Lolabox, who scored seed investment from Grupara Inc.
According to Sutardi, the issues did not come as a surprise. Boxes were always sold out like the hotcakes that they were. However, the company did not grow, as it kept trying to create different variations with a cap on supply.
Going forward, Sutardi will join Monk’s Hill Ventures in Jakarta, and his Co-founder, Cynthia Chaerunnisa has joined Singapore-based Luxola as Indonesia’s Head of Marketing.
If Sutardi was able to predict this fall, would he have done something differently? He replied, “That’s an interesting question…but hard to answer…probably looking for exit options earlier? But seriously, I think we did great, and it was a little bit of a gamble as well.”