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In this episode, Alizila editor Alison Tudor-Ackroyd talks to JuE Wong, CEO of Olaplex, a professional haircare line.
They dig into the latest trends in China’s fast-growing haircare market and how brands can take part in China’s largest shopping festival, 11.11.
Olaplex reported on Thursday that its net sales rose 81% in the third-quarter and will jump 117% for its fiscal full year versus a year earlier.
Below is a transcript of this Alicast, edited for clarity and brevity
Alison Tudor-Ackroyd:
JuE, great to have you with us. You’re well-known in the beauty world after steering Olaplex through its IPO and serving as CEO of Moroccan Oil. Could you say a few words to introduce yourself to our listeners, please?
JuE Wong:
Absolutely. Well, first of all, thank you for having me. This is definitely a very exciting time for Olaplex. As you can see from our IPO filing, we see ourselves as an innovative, size-enabled technology-driven beauty company. Our goal is to continue to serve up whatever consumers want to address their damaged hair, not by masking it, but by truly giving them a solution in the very first application. So, we remain very excited that there’s just so much we can do in the space of prestige haircare.
Alison Tudor-Ackroyd:
Tell us a little bit more about your China business; when you started in China and how is this market important going forward?
JuE Wong:
Yes. First of all, the China market for me personally is a very important market being Asian myself. When I was in Singapore, China was an emerging dragon and today China is at the forefront of everything, whether it’s digital, whether it’s social commerce or whether it’s trends. C-Beauty [a.k.a Chinese-born beauty brands], is a very big piece of the beauty psyche.
What’s important for us is we started officially a year ago in China through Tmall Global on 11.11 in 2020. So, 11.11 2021 will be our anniversary. So, we are super excited. We have seen early signals that the program is doing well and the reception among the Chinese consumer for our haircare brand is tremendously strong; primarily because I think that both the Chinese and the Asian consumers look at haircare almost like skincare. And I think the skinification of hair will continue to really be showcased in Asia primarily, and especially in China where it’s such a dominant market when it comes to beauty.
Alison Tudor-Ackroyd:
While we’re talking, the world’s largest shopping festival is in full swing. The offices here are really abuzz with activity. Could you tell me how Olaplex is getting involved with 11.11?
JuE Wong:
Yes. Super excited. Given that it’s our first anniversary, we really want to make sure that people continue to be very attracted to the brand for all the right reasons. So, we are doing a celebrity collaboration with Zhou Keyu as well as doing live streaming with Austin Li. We have worked with Austin Li before, and he has done tremendously well. So we believe that our continued collaboration on those fronts to help really drive awareness for Olaplex in China, with the 11.11 platform through Tmall Global will be especially relevant.
Alison Tudor-Ackroyd:
This festival just keeps on growing. Do you think it’s a really important landmark for retailers?
JuE Wong:
Yeah, anything that can help us message and share with the Chinese consumers, what exactly are we serving up, is always going to be relevant. I think especially with this festival, with 11.11, primarily because it was a holiday or a shopping feast created by the Chinese consumers, or by Alibaba through the Tmall Global platform, and it’s now become a staple. Every year everyone looks forward to it.
As soon as it is over, we are already planning for the following year; that’s how important the festival is to so many of us and for Olaplex it is no different.
Alison Tudor-Ackroyd:
You’ve mentioned your partnership with Tmall a couple of times now, and it also was in your IPO documents. So it seems material. Could you tell me a little bit more about the partnership? What’s involved? What are the most powerful tools that you’re leveraging?
JuE Wong:
Yes, we don’t work directly with Tmall, we work through our a cross-border distributor called SuperOrdinary. They represent a lot of brands that are familiar with the China market, and also familiar with the Tmall Global platform. So, for us, what is important is that seamless experience that the Chinese consumer has grown to expect? They are obviously doing a lot of research, whether it’s online or offline.
We want to be sure that when they experience us on Tmall, that experience extends, just not through the screen, but also when they receive their products, how the products are being used by them through understanding the product, obviously online, by researching us.
All this really adds up. Tmall allows us to give the consumer that experience. Ordinarily it would be very tough for a U.S. brand that doesn’t have a full brick-and-mortar presence in the Chinese market to do.
Alison Tudor-Ackroyd:
To give our audience an idea of the reach of Olaplex and have far it’s come since it was founded in 2014, what does Olaplex’s global footprint look like now?
JuE Wong:
Olaplex is under seven years old. We are in 60 plus countries, as our IPO filing has indicated. Our business is about 50:50, 50% in North America and 50% international. So we have a fairly decent, robust business, so to speak. And we are also an omnichannel brand, meaning that we are in professional hair salons, specialty retail, as well as online, which is direct-to-consumer. We classify those players as pure plays, which Tmall Global would be because it’s a cross-border platform. We see ourselves as very synergistic, very mutually reinforcing, because we believe today’s customers should be able to find us whenever and wherever they want to.
Alison Tudor-Ackroyd:
I’d like to dive into the big topic right now. How has the coronavirus pandemic impacted the haircare industry? And would you say that it’s made diversification of channels and markets more important for Olaplex?
JuE Wong:
I think what the coronavirus and Covid-19 has really done is to make a lot of people self-reflect. And I think you’ve heard the phrase self-care used fairly commonly during this time. Primarily because people were locked down at home, they saw themselves a lot on screen and they realized that time was saved, instead of spending an hour or so to commute, that hour or so could be used.
Unfortunately for a lot of us, we used that time to probably have more meetings. But, what I’ve seen is that beauty in general and haircare in particular, has benefited somewhat from that self-care ritual and that routine. I believe because hair is so visible, it’s a little bit like color cosmetics, when you put on makeup, you can actually see a difference in your skin and with hair when you use the product and you really see the healthiness of the hair coming through its very encouraging. Then you want to keep doing it so that you can have that same result, again and again.
Alison Tudor-Ackroyd:
One for the beauty mavens out there, the “skinification” of hair is really taking off globally by that, I mean, introducing skincare rituals, into haircare, such as masks and oils. I’d love to hear Olaplex is responding to this trend.
JuE Wong:
I think Olaplex was skincare for haircare right from the very beginning when they launched in 2014. I say that only because if you think about it, what Olaplex did was it did not just have retail products in the professional channel. It really dove deep into what we call the backbar [the shampoo bowl in a salon]. Only licensed cosmetologists are able to buy those products for use in backbar services.
So, if you think about it, it is almost equivalent to dermatologists serving their patients. Therefore that relationship in the backbar, together with Olaplex, is like a doctor-patient relationship. For us, it was never about a marketing move, it was always about giving the licensed hairdresser an opportunity to raise their artistry and their craft.
Alison Tudor-Ackroyd:
Staying on skinification a moment, it’s such a fascinating trend, I understand that Olaplex is exploring new categories, such as scalp care and skincare. I think you mentioned this in your IPO documents, any updates for us?
JuE Wong:
Let’s clarify, scalp care is very logical, especially when you are looking at addressing damage. Healthy hair just like skin, starts from the core. To have healthy hair, it really also starts from the scalp.
But just to clarify on the skincare adjacency that was in our public filing, we have patents that have applications not only in haircare, but also in skincare. So, we did a study through a very reputable, global agency to find out does Olaplex, even though we have the patents, have the authority and the ability to play and win in the skincare space.
The data was very encouraging. About 82% of people who are familiar with Olaplex basically said I would love to see skincare from Olaplex and about 50% of that 82% basically said they would choose Olaplex skincare sight unseen, ie swap out whatever they were using. When we pressed them “How is that?” They said they saw us as a science-enabled and technology-driven brand and company, and therefore they had that faith and that trust in us.
Alison Tudor-Ackroyd:
I wanted to move to another really big trend in haircare and beauty care more broadly. Globally, we’ve seen the rise of male beauty products. Do you reckon that this is a trend to watch going forward? Is this something that you’ve also spotted in China?
JuE Wong:
In Asia in general, and now in China in particular, male consumers are no longer seen as vain. Male consumers who are interested in their skin, in their hair, in overall wellness, see this as a healthy approach, it’s not about vanity. So, we are seeing a lot of male consumers going after the health angle and that’s giving a lot of Western guys that same perception. I think the male population is going to, especially the younger set, realize that if they can have earlier care that they can take care of themselves sooner, it’s more like prevention is better than addressing a problem.
If they can prevent something from happening and really take care of themselves, they can actually have healthier looking hair for much longer and healthier looking skin too.
Alison Tudor-Ackroyd:
The world is grappling right now with meeting demands and logistics. How are you guys managing the supply chain problem and overcoming these challenges. Specifically for 11.11, how is Olaplex working with Tmall Global to deliver products to Chinese consumers?
JuE Wong:
I think first of all, what is very important to note is that Olaplex has a distinct advantage, again, reflected in our filing, our relationship with our suppliers, with our vendors, with our raw material suppliers. It’s not just about making sure that the supply-chain piece works well, its multi dimensional. It’s not just about the products from end-to-end, obviously that is always important, but also having that relationship is just as key, so that we know that we can lean on them should we need more or less.
What is important to note is that we have a very tight assortment and when you have a tight assortment it is less confusing for consumers because they know exactly what its about. You talk about skinification, the regimen that builds the routine, and then with a tight assortment, it’s also easy to manage with your supply chain because you’re not looking at hundreds of SKUs. In the realm of Olaplex, we have eight retail SKUs that is so much easier to manage and to really communicate. Most traditional beauty companies have hundreds of SKUs.
Alison Tudor-Ackroyd:
While we’re talking, the world’s largest shopping festival is in full swing. The offices here are really abuzz with activity. Could you tell me how Olaplex is getting involved with 11.11?
JuE Wong:
Yes. Super excited. Given that it’s our first anniversary, we really want to make sure that people continue to be very attracted to the brand for all the right reasons. So, we are doing a celebrity collaboration with Zhou Keyu as well as doing live streaming with Austin Li. We have worked with Austin Li before, and he has done tremendously well. So we believe that our continued collaboration on those fronts to help really drive awareness for Olaplex in China, with the 11.11 platform through Tmall Global will be especially relevant.
Alison Tudor-Ackroyd:
This festival just keeps on growing. Do you think it’s a really important landmark for retailers?
JuE Wong:
Yeah, anything that can help us message and share with the Chinese consumers, what exactly are we serving up, is always going to be relevant. I think especially with this festival, with 11.11, primarily because it was a holiday or a shopping feast created by the Chinese consumers, or by Alibaba through the Tmall Global platform, and it’s now become a staple. Every year everyone looks forward to it.
As soon as it is over, we are already planning for the following year; that’s how important the festival is to so many of us and for Olaplex it is no different.
Alison Tudor-Ackroyd:
You’ve mentioned your partnership with Tmall a couple of times now, and it also was in your IPO documents. So it seems material. Could you tell me a little bit more about the partnership. What’s involved? What are the most powerful tools that you’re leveraging?
JuE Wong:
Yes, we don’t work directly with Tmall, we work through our a cross-border distributor called SuperOrdinary. They represent a lot of brands that are familiar with the China market, and also familiar with the Tmall Global platform. So, for us, what is important is that seamless experience that the Chinese consumer has grown to expect? They are obviously doing a lot of research, whether it’s online or offline.
We want to be sure that when they experience us on Tmall, that experience extends, just not through the screen, but also when they receive their products, how the products are being used by them through understanding the product, obviously online, by researching us. All this really adds up. Tmall allows us to give that consumer that experience, that ordinarily it will be very tough for a U.S. brand that doesn’t have a full brick-and mortar presence in the Chinese market.
Alison Tudor-Ackroyd:
So this 11.11, Alibaba has placed greater focus on sustainable consumption. Could you tell me how is Olaplex practising sustainability and being more environmentally responsible?
JuE Wong:
Being environmentally responsible has been in the DNA of Olaplex since we started in 2014, and that was before ESG was even a huge platform. Olaplex has deliberately not used secondary boxes in their lineup whenever possible. Because of that, we are able to document with an international paper board that we save something like 23 million pounds of greenhouse gas from being emitted into the environment, more than 30 million gallons of water from being wasted and 29,000 trees from being deforested.
So, going into 11.11, and coming into China, it was very clear to us that we were going to continue with that carbon-negative packaging platform.
Also, joining in the festivity, we are encouraging our consumers to really look at it in virtual bundles, rather than in kitted format. Because anytime you put anything in a kit, that’s an additional packaging and box and additional inserts that can really impact the environment. Because 11.11 is such a huge shopping day, you can imagine how much could be emitted into the environment if you’re not careful. So we are very proud of the fact that our consumers through our distributors are very receptive to our suggestions of virtual bundling.
Alison Tudor-Ackroyd:
So, how is 11.11 going for you guys?
JuE Wong:
It’s our first year anniversary and through our distributor SuperOrdinary, they already started as of October 15, because smaller brands tend to have a little bit of a lead. They know they have to, especially for us, but well, the larger brands are going to have a lot more of that main stage event on the actual date itself. And I’ve been given early reportings that we are already multiples over the same time last year, and last year we were already in a very good place.
So I do believe that China is a long game for us. Its not a one-hit wonder, and we are super excited to really bring customers along with us and have them spread the word, we are the Instagram’s number one most-followed social media brand, and we hope to continue that legacy in China.
I believe that China is a long game for us. It’s not a one-hit wonder
Alison Tudor-Ackroyd:
What has teaming up with Sephora meant for Olaplex? Also, how are you looking at other ways to reach consumers more directly?
JuE Wong:
What is important to note is that we are truly an omnichannel brand. We don’t see ourselves as multi-channel. I make that distinction very deliberately. Multichannel is where you are co-existing, you are kind of saying I have to be in these channels because it is what my business requires.
In the case of Olaplex, it is synergistic and mutually reinforcing. When we are in the professional channel, it does not denigrate our retail and vice versa, nor does it impact our direct-to-consumer. I’ll give you a couple of very poignant statistics, 35% of our customers are actually referred by hair professionals to Olaplex; and 50% of our direct-to-consumers actually buy at salons as well as at specialty retailers.
So you can see that every time when Olaplex is in a channel, it does not take away from the others, in fact, it’s mutually reinforcing. The reason why that is, is because we are a community-based brand, we are socially very relevant. When you do that, I think you exude authenticity and your consumers want you to be part of their ecosystem.
Alison Tudor-Ackroyd:
Thank you so much for joining us on Alicast and thank you very much for your insights into the world of haircare. It’s been a pleasure talking with you.
JuE Wong:
Thank you so much for having me. And I hope everyone who is listening out there has a wonderful 11.11 season.
Yeah. I learned a lot both from reading and recording this podcast today. Thank you, Barbara, for sharing all your insights.
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“Alicast” is a production of Alizila, the corporate newsroom of Alibaba. It’s produced by Monica Suk and edited by Alison Tudor-Ackroyd. If you’re in a podcast app already, please follow “Alicast”. If you’re listening on Alizila’s website and want each new episode of “Alicast” delivered to you as they’re published, download any podcast app, then search for “Alicast” to follow the show. Thank you for listening.
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