Last February 21, 2023, ANVIL Business Club invited Ms. Jacqe Yuengtian Gutierrez, the owner of Happy Skin and BLK Cosmetics to share her thoughts about Entrepreneurship.
Thanks to her 9 years at Unilever as Head of Skin Marketing Department where she handled the brands Ponds and Doce, Jacqe was motivated to think that Filipinos can be prettier. She saw that the market was still ripe for women purchasing makeup from local brands. As Jacqe has said, “Penetration of the makeup category is low — Less than 25% of Filipina women buy and wear makeup. This means, there’s 75% of the Filipina market I can convert.”
This is one reason why she’s not insecure of competitors entering the makeup space. “The more brands there are, the more I can convert,” she confidently shared.
Happy Skin first launched in Beauty Bar, which marketed international brands. This became a good move as people assumed that Happy Skin was international and was open to try their products.
“The best thing about makeup is once you’re hooked, you’re hooked. If you like the brand, you’re most likely to buy other products within that brand,” Jacqe quipped.
After their success, Watsons came knocking on their door (Offline retail). Jacqe reminisces that it was not easy to get a slot at Watsons, but thankfully, they were approached by the retail giant. “You can’t be the number one makeup brand if you’re not in Watsons. Watsons is extremely good in building beauty,” Jacqe stated.
The exit of Loreal from the Philippines and Watsons also opened a multitude of opportunities for Happy Skin. When Loreal exited, Happy Skin took over their 80 doors at Watsons. Jacqe admitted it was scary and a huge investment but still proceeded after closing her eyes and making that leap. Now, their brand is the number 6 brand in all of Watson’s, and they are one of the highest earners per door per sqm.
They also took advantage of Instagram. Happy Skin started the same way Instagram became popular. A common marketing practice is to seed products to influencers, who make content.
In fact, the Covid-19 pandemic provided a boon of opportunities on Happy Skin. At that time, many cosmetics company did not launch any products given logistical issues and fear of the unknown. Hence, Happy Skin continued to launch new products and seed products to content creators, who were more than happy to create the buzz in a back-then lonely and quiet space.
“Maximize content creators: If there’s something they can sell, they will. There are lots of of content creators that won’t need to pay. Get into IG, Facebook, Tiktok. Because it’s all about social media these days. It’s about regular people promoting products.”
Happy Skin also took advantage by selling their products online. When people go to Lazada, the first thing they buy are beauty items and electronics. Jacqe comments that girls don’t have just one lipstick, or one blush, making pushing impulse buys a good strategy. She cites Lazada for being great in supporting Happy Skin and investing on brands.
To be fair, quality of their goods are excellent. Happy Skin products are sourced from Korea and Taiwan with the right proper active ingredients.
In the beginning, they launched Happy Skin as a premium. At that time, a ₱799 lipstick of a local product was unheard of. People thought that if Filipino, it’s cheap. But Happy Skin priced more premium because their ingredients are more premium. The branding and quality do make the heftier price tag worthwhile.
Happy Skin apparently is high in luronic acid, a moisturizer. BLK Cosmetics have more brightening ingredients, Niacinamite.
Jacqe admits it was harder to open Happy Skin. This was because they were nobodies. Five years ago, BLK opened and it was easier. BLK quickly became the #3 local makeup brand, fighting alongside other older makeup brands like Maybelline and Ever Bilena. BLK grew very quickly as sales grew tremendously online.
The most popular collaboration has so far been Happy Skin and Disney, which elevated Happy Skin into the next level. Sales flew off the roof and they could not keep up with supply.
Jacqe also shared celebrity collaborations with Kris Aquino, Heart Evangelista and Kathryn Bernardo also helped in marketing Happy Skin. They worked with all these celebrities to launch a collection with them.
Other Words of Wisdom
• Competition is not a problem. Because it helps the awareness of makeup usage in the Philippines, which will only grow Happy Skin sales more.
• Philippines are followers. But there are no innovative brands. The secret to Happy Skin’s continuous success is their speed of marketing and innovation.
• Everytime they launch, it halos. Happy Skin follows US, Europe and Korean trends closely. Their bestselling is cushion foundation which has been there in Korea. In fact, Jacqe is surprised other local brands never followed suit.
• “I want to be a dried mango,” she said. The same way Filipinos bring dried mangoes overseas as pasalubong to their kababayans, Jacqe hopes that Filipinos would bring Happy Skin products to kababayans overseas, bring pride to the Philippines.
• They have a lean organization with less than 30 pax in head office. Lots of beauty advisers. BLK on the other hand has less than 20 people. Their people are only in the office twice a week since they are delivering despite working mostly from home.
• Jacqe picks young individuals who are old souls. People who really want to work, and are passionate about makeup.
Culture fit is important. She incentivizes her people by giving them credit for their work —- for example, she cites that her staff conceptualized the marshmallow tint transfer-proof lippie from scratch and traveling. They did not scrimp on the team building in Palawan, and she lets her people accompany her on trips.
• Jacqe took her Graphic artist to Korea. She travels with her product marketing team. As a result, they get so close. It’s harder for them to let go. Incentivizing and making them feel like family is important. Activities like karaoke, bowling night, and badminton offer better work life balance.
• Maybelline sells ₱1.5 billion in Watsons and is their #1 makeup brand.
• Showcase store: Happy Skin is pure marketing. Building a store is to market. It’s more profitable to open own store since you only pay 3% plus fixed basic rent. Ayala and Robinsons kiosk charge fixed so there’s additional profit. Whatever profit they have, they reinvest back into the business.
Retail is 60-70% of business. Beginning of last year, wala nang mabenta. Jacqe didn’t think Q4 sales to be this crazy but it was. They invested millions to build a store.
• Jacqe is anal about EBITDA. Every month, she checks it. EBITDA is what goes into your pocket. If EBITDA is on target, they can spend a little bit more. Jacqe also checks which channel will give them the best profit (EBITDA) so they can reinvest in the business.
• Original partners not all with her now but 60% of the brand are still the same people.
• First year: 10 employees. Seed money was small. Php15 million to open restaurant. They packed things themselves. Jacqe’s greatest resources is knowing where to get OEM overseas. She knew who to contact, and how to test products, making products extremely good.
• First few years, they have mistakes. With overstocks, they have to dispose through sales. Birthday, 3.3. Forecasting is not a science. There’s no historical data for makeup. So Jacqe does it per store, and forecast per door. MOQ for makeup is high. 10,000 pcs is needed for a single shade so before may extra lagi. Now, it’s easier since they have more distribution channels to spread out their SKUs.
• Suncreen stick MOQ was 20,000. Ubos in 3 weeks. But that’s not normal. 4 weeks out of stock. This was because a content creator called Marge from Tiktok promoted the hell out of it. Once it’s out of stock, hindi na siya uso. Clickbait. Domino effect. If maraming nagsabi ng product.
• Marketing and advertising budget of Happy Skin is still prudent: It is less than 10%. So very small. Unilever was 20% max. 15% cost for beauty advisor cost. 2-3 BA per store.