eCommerce case study: the story of Saigu Cosmetics(1)
Laia Ordoñez
09/06/2022
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Today, we share the story of Saigu Cosmetics with you, a new brand of non-toxic cosmetics and makeup that is coming on strong.
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Just when we thought cosmetics and makeup sector could not take anyone else, along comes Saigu Cosmetics and shows us that with a niche proposal, which is very focused on product quality and offering the customer reasonable prices, it is possible to carve out a niche even in the most mature sectors, and in the midst of a pandemic!But what is Saigu Cosmetics, what is its value proposal, what is its story, where did it come from and where is it headed? These and many other questions is what we will discuss on today´s post.
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What is Saigu Cosmetics?
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Saigu Cosmetics define themselves as "natural cosmetics for demanding skins", and the truth is that this claim fits them like a glove. They are exactly that: natural cosmetics, with a very careful formulation as we will see, for demanding skins, that is, for skins that are not satisfied with just any finish and that seek maximum perfection in the appearance of their skin and their makeup.But Saigu Cosmetics goes one step further.
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All ingredients used in their formulations are natural and local; the production of all products is local. But they are not only concerned about of product´s naturalness and sustainability. In addition, they show concern about packaging and everything related to its sale. For this reason, their products are sold in recyclable glass containers with wooden caps.As if that was not enough, they even turn the very concept of makeup and cosmetics on its head, presenting this type of product not as a way to "cover up" who we are, but as a way to enhance and celebrate it. They are practically telling you that you do not need makeup to look great.
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INSIGHT: If you are going to getting into a mature market, make sure you are a real breath of fresh air. If you are betting on natural and sustainable makeup, being truly sustainable is a key selling point to start getting your foot in the door.Even the customer knows that there are many "natural" cosmetics and makeup brands that are not as sustainable as they would have you believe. For example, many of them use "recyclable" plastic in their packaging, or ingredients of very distant and unsustainable origin such as palm oil.If you are new and want to have credibility, go for something radically authentic and aligned with values that resonate with the times.
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The story of Saigu Cosmetics: how did it all begin?
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Saigu is a brand that was born yesterday, as it was. It launched its first 4 makeup products in 2019 and since then, even despite the pandemic, it has not stopped growing. In 2020, in full confinement, it reached sales of €350,000, and in 2021 it closed its first round of funding with the aim of growing the business.
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The founding partners of Saigu are Gerard Prats and David Hart, two Menorcans who met at university but did not join forces with a common project until after some professional experience after higher education.Gerard Prats, a chemistry graduate with a master's degree in dermopharmacy and cosmetology from the UB, worked for 5 years in a makeup manufacturing company in Barcelona, first as sales manager and later as technical manager.This experience allowed him to appreciate in detail the lack of sustainability in the production of this type of products, which based their formulas on petroleum-derived ingredients and used huge amounts of plastics for packaging. Like his generation, Gerard was concerned about the environment and felt great frustration at having to work in a direction that did not fit his way of being.Little by little, he began to ask himself the impossible: would it be possible to create truly natural and sustainable makeup, and would he be able to produce a quality product in Spain using only natural ingredients and environmentally friendly materials?
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It was a very good idea, but Gerard did not rush into it. Several things were clear to him. First, that the make-up sector was a very mature sector, where it was difficult to find a competitor. Also, it was very difficult to produce a Top product locally with 100% natural ingredients. And third, that in a business there is a whole part of the company, and not just the product, which must be taken care of.But he was also clear about the following: that with a very niche proposal, he could make a niche for himself; that, although it was difficult to materialize his idea, it was not impossible; and that if his idea prospered, he needed someone he trusted behind the business side.
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INSIGHT: Gerard's idea and its implementation strategy had the right ingredients to come together: niche proposal, authenticity and quality, and the need for a complementary management tandem that could perfectly master both the technical and business sides.
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At this point, Gerard contacted his friend David to tell him about his idea. David, an ADE graduate with post-college training in the US, had founded a digital magazine for millennials in 2016 and was deep into digital marketing. He thought Gerard's idea was great and together they spent a full year of testing and prototype development with a local industry partner.
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INSIGHT: To do things right, slow and steady. Gerard and David took the time to test different developments and to opt for a formulation that matched the product they had in mind.
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Saigu Cosmetics is born
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Finally in early 2019 they launched their first 4 products on Instagram, all makeup, achieving a percentage of natural ingredients between 99.4 and 100% In addition, it was made through local production.
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We digress to highlight the fact that the launch was on Instagram. Since its inception, Saigu Cosmetics has been committed to guerrilla and digital marketing. As we will see below, today they rely heavily on influencers and social networks. And of course the vast majority of their sales come from the digital channel through their online store.At the same time, at a business level they have bet from the beginning on the Lean philosophy, a way of doing that has allowed them to launch quickly and without much fuss the minimum viable product, test it with the real market and pivot if necessary. And so far this strategy has worked to perfection.
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INSIGHT: It fully capitalizes on the fact that it is a "child of a time". The current era is not one of big presentation events, giant flagship stores or mass media. On the contrary, it is an era of guerrilla marketing, reputation and word-of-mouth, and the influence of highly specialized characters and celebrities known only to their followers in ultra-fragmented audiences. You must know how to use the tools that your time gives you to get closer to the people who live in it.
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The success that followed surprised even them. They reached the month of August with a turnover of €90,000, something they did not expect at all. But it showed them that there really was a niche market interested in quality natural and sustainable cosmetics, and that the options available so far did not cover that interest.
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Lanzadera accelerator arrives... and pandemic
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Soon after, Lanzadera, the accelerator that Juan Roig (Mercadona) has in Valencia, crossed their path. David and Gerard were selected to attend a business training program that allowed them to obtain a more global and strategic vision of their own business, and acquire skills to present the project optimally to investors and financing rounds.They gradually expanded their product range, adding several more makeup products. But then the pandemic hit and they decided to stop for a month to rethink their priorities and avoid layoffs. They came to the conclusion that, strategically, it was in their best interest to focus more on cosmetic products for a while, and so they launched their 2 treatment products: a day serum and a night serum.
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The pandemic had many bad things, but it had one feature that benefited all digital businesses a lot. And that is that people, being cooped up at home, spent the day on social networks.This made it possible for many brands that had previously gone unnoticed to gain a lot of visibility, especially on Instagram and TikTok. And Saigu took advantage of this to invest in social advertising and create alliances with specialized influencers - very varied in terms of age and profession - who had in common a commitment to sustainability, nature and the environment.
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INSIGHT: If life gives you lemons, make lemonade; if life gives you a pandemic, turn it around and make it work in your favor. At Saigu, they were very clever when it came to realizing that the pandemic brought them unusual attention on social networks, and they took advantage of the situation to form the alliances that, after the pandemic, are proving to be key to their growth.So take advantage of the lean times to come up with creative ways to get ahead: you will reap the rewards when the rough patch is over.
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In the next post we will analyze key aspects of Saigu Cosmetics' digital marketing. We recommend that you do not miss it and that you take a pen and paper to write down ideas, because they are betting on many super effective guerrilla actions that you might be interested in learning from them.
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Did you know Saigu Cosmetics? What do you think about their story and their first steps? We follow them closely being convinced that they will know how to do things in a different way at all levels.
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Images| Saigu Cosmetics.