The startup recently announced that they raised a total of $29 million in funding. Investors include Yahoo cofounder Jerry Yang and venture capital firms Formation 8 and Goodwater Capital. Investors are less interested in the beauty product, and more so in the potential to revolutionize the antique beauty industry and provide a 24/7 seamless e-commerce experience.
Since launching in 2012, Memebox has grown 400% every year. This year, the U.S. operations have grown 50% every month.
Learning from the Evolving Retail Industry
The retail industry has seen a paradigm shift in production cycles. Today, retailers introduce new merchandise weekly based on the most recent trends. They use a vertically integrated supply chain, which means the retailers own every step of the production process.
Chains like Zara and H&M have seen immense success with this strategy because it creates cost and time efficiency. Today, fast fashion retailers outperform traditional retailers. In the past fiscal year, Zara had sales of $19.7 billion, compared to Gap with $16.4 billion. Memebox embraces this agile approach.
“For a lipstick, if we see consumers really want a new specific type of red color, we are able to produce it in a span of two months whereas most other brands would take 14 months,” Head of U.S. Operations, Arnold Hur, said.
The startup eliminates the middlemen, such as the product development team, because it relies on data including search traffic, internal sales, and even social media feeds to understand customers’ demands. Then, Memebox collaborates with their trusted manufacturers to select the formula, pigmentation, and texture.
“We use this to get up to speed on the latest trends and produce them as fast as possible so that consumers can have what they want in their hands before anyone else,” Hur said. “We’re not just looking at the fashion runways for inspiration, but we marry it with a really interesting data driven approach.”
Instead of relying on third-party providers, Memebox has its own 1,500 square foot logistics center. This allows flexibility to react to the sudden changes in the market. Memebox is also able to customize the product in any part of the chain. “Owning the entire vertical puts us in a unique place to really improve every aspect of a customer's experience,” Hur said.
Many critics argue that the quick turnaround leads to poor quality and short-lived products. Memebox doesn’t sacrifice quality for the speedy production. The startup uses the well-respected factory, Cosmax, whose clients include powerhouse L’Oreal.
From Seoul to Silicon Valley
Memebox was originally founded in Seoul, but soon moved to Silicon Valley to be in the hub of innovation. The startup craved the entrepreneurship energy in the Valley.
Global Strategy Manager Alicia Cha comments on the startup’s decision process of relocating: “While it would always be the smallest team since the US is not considered our ‘growth’ market, it would be the brain for the other markets, on how to become a global company. Risk is embraced here, whereas it was shunned or criticized in Korea.”
According to Hur, Memebox’s goal is “to create the world's best mobile and online beauty shopping experience by marrying a fully vertically integrated approach with the latest in technology.”
The team is no stranger to e-commerce. Hur was recently at Google working on travel search and mobile payments, while co-founder “Dino” Ha Hyungseok was a sales manager at Travel Monster, a Seoul-based daily deal site.
Memebox aims to aggressively invest in engineering, and the company continues to create new ways to reach beauty aficionados around the world.