@cosme has a very unique business model. It started as a product review website where customers could comment about cosmetics of all the brands in Japan.
Today, around 2/3 of Japanese women between 20-39 years old are active users of their website.
Based on the reviews, @cosme creates a ranking for each segment/category of cosmetics, and the higher the score of the brand, the higher are usually the sales on the website.
After successfully launching online, @cosme has been opening stores to provide a true omnichannel experience to its users. After testing in Japan, the business model is ready to go global, and @cosme store is now in HK.
@cosme has launched in HK, at the Star House, a 10,000sqft in the heart of Tsim Sha Tsui. The store offers over 5,000SKUs and 90% of cosmetics are from Japan.
Retail in Asia has visited the massive store, and met Mr. Hajime Endo, Senior Vice President of istyle Inc. and President of istyle Retail(Hong Kong)Co Ltd.
RiA : What’s the concept behind @cosme store?
Mr. Hajime Endo : The concept of @cosme store has three main features:
- You can test
- You can meet
- You can find your destiny
That is, you can meet the perfect product as if it was designed exclusively for you!
RiA : @cosme store is very popular in Japan, and online across Asia, why a retail store in HK?
Mr. Hajime Endo : The store in HK shares the same features as our stores in Japan.
Customers can try all our products in store as we have testers available for each and every type of product.
The product display is very informative and our @cosme ranking is updated in the store. Additionally, our very well trained staff offers free consultations and advise our customers to suggest them with the most suitable products.
RiA : @cosme website is a very powerful tool to collect data about consumers’ preferences. You collect a lot of reviews, but what about the actual prediction of a trend?
Mr. Hajime Endo : Our business first started as a review site on cosmetics. This type of model is not Hong Kong –specific, but was founded in Japan. It is all based on consumers’ reviews – users going to the website and commenting on the products. Based on those reviews, we produce a ranking and we decide what to sell online and offline.
RiA : Do you work with influencers and KOL in this review platform or are your reviews all from genuine customers?
Mr. Hajime Endo : All reviews are from customers. It is an independent platform everyone can access. If the reviewer is a KOL, we cannot know, for us he/she is a customer.
RiA : What are the similarities and differences between the offline and online experience?
Mr. Hajime Endo : The retail store is a replication of the website, and on top of that, you can test the products.
RiA : What is your plan to bring @cosme from Japan to the global market?
Mr. Hajime Endo : @cosme’s business model relies on three pillars: online reviews media, online, and offline stores.
Those are our three main businesses in Japan. While going global, we want to have those three segments in each region and country. We want to stay consistent and close to our core values and original concept.
Among those 3 different types of businesses, offline store is probably the easiest one to enter the market and also the easiest to differentiate from others. In fact, it is quite successful in Japan which is why we decided to first enter overseas markets with offline stores.
RiA : So what would you say is your unique selling proposition in comparison to other cosmetics retailers?
Mr. Hajime Endo : First of all, the variety of our product range as we offer goods from US$1 to over US$100.
Another point is that you can test almost all products even those costing over $100, there are no limitations.
We want our customers to be fully aware of what they are buying.
Moreover, we provide a unique premium customer-oriented environment, offering our customers all the facilities to test the products freely.
Also, we strive every day to answer our customer needs by analyzing and reviewing the data collected from our internal media in order to have a better understanding of our current popular products and make them available in our retail stores.
Customers are really our primary source of information.
We have around 16M active users in Japan per month, this represents 2/3 of women in Japan aging from 20 to 39.
RiA : Is your website only available in Japanese?
Mr. Hajime Endo : Mostly yes, but we are working on translations. Some of the @cosme site is already available in English, Simplified Chinese, Traditional Chinese, and Korean
RiA : Based on the translations you are working on, what are the countries that you are investing more resources on?
Mr. Hajime Endo : Last year, we opened our first store in Taiwan. Following the opening we have further expanded and we can now count 4 stores in the region.
Our second offline market is Hong Kong, where we opened our first store this year and are currently committed to open 3 additional ones by the end of the year.
A country in which we have no physical presence yet, but we are planning to by the end of November, is Thailand.
We are currently testing Malaysia online. We have also been active in the Chinese market for 4 years now, selling online only.
We are also looking for opportunities in Singapore.
RiA : How about HK, you chose star house as location, which is a very touristic area, any specific strategy to target tourists?
Mr. Hajime Endo : Although you said it is a tourist place, we are targeting locals. And if you look at the customers who are in the store right now, they are mostly Hong Kong locals.
Eventually, once HK customers accept us, appreciate, and talk about us then we believe the tourists will follow. Nonetheless, we are planning on opening a new store, which will definitely target tourists.
RiA : Are all the users in your platform based in Japan or could you give us a geographical segmentation of the customers giving reviews on your platform?
Mr. Hajime Endo : The number of visitors to the website or the users writing reviews are mainly Japanese. We won’t disclose numbers, but there are roughly 10% of visitors to the website coming from overseas. We decided to expand abroad and come to HK because we know that our partners – the cosmetic brands – use our ranking as reference in order to promote their products. I believe that per each Asian country, probably 50% of women between 20 and 40 know @cosme.
RiA : Do you think having Japan as a country of origin plays an important role for @cosme?
Mr. Hajime Endo : In Hong Kong and Asia, people all look up at Japan as it has always been a very strong and popular culture reflecting a very fashionable image, often followed by Koreans.
I do believe having Japan as country of origin to @cosme plays a role in the brand’s success. We see lots of Asian tourists coming to Japan and cosmetic is probably one of the first product they will buy as a gift for their friends or themselves. This is a trend we have frequently observed, thus motivating us to expand overseas to sell our products.
SEE ALSO : Japanese brand ‘LB’ targets Korean market
Retail in Asia is looking forward to the next two openings in Hong Kong, which will be by the end of the year.
The first one will be “@cosme store tmtplaza” opening at “tmtplaza”, a large shopping mall in New Territories West. It is a popular shopping spot that 300,000 people visit each day, including not only citizens of Hong Kong, but tourists from Mainland China as well.
The store interior packs all the charm of “＠cosme store” into a retail space of 115m².
For the occasion, in addition to popular brands such as “FLOWFUSHI” and “Chacott” that simultaneously will debut in Hong Kong with the opening of the second Hong Kong store, “freeplus” is expected to join the brand lineup.