- Producing goods under your own brand at a third-party factory is no longer a problem. The problem lies in selling it 😉 Nevertheless, the number of such manufacturers is actively growing. And that means — it’s a huge market!
- And now, you can enter this market with such an interesting model. And it’s also promising — otherwise, a well-known cosmetic company and a renowned venture fund wouldn’t have invested in this startup.
- Essentially, this is the evolution of the old Kickstarter idea — but in a refreshed format. Thus, the concept of the startup is not only viable but also relevant.
Project Essence
KIKI World offers to “join the future of the beauty industry.”
Their concept revolves around famous individuals and influencers proposing ideas for new cosmetic products on their website, with users voting for these products.
The products that garner enough votes are the ones the startup will manufacture and sell. It’s clear that the authors of the ideas will receive a share of these sales, but the exact distribution between the startup and the idea author is not explicitly disclosed.
Interestingly, the voting process occurs in several stages:
In the first stage, voting is conducted for the overall concept of the product. In the second stage, it’s for the “super features” that this product should possess. And in the third stage, it’s “what’s next?” meaning how this product can be improved in the next version or complemented with other products.
But that’s not all — users who vote for these products will also receive rewards. However, in their case, there is no mention (yet?) of earnings from product sales. Users will receive points that they can later use when purchasing products on the site.
Additionally, they can purchase specially issued NFTs (Non-Fungible Tokens) from the startup. The startup uses blockchain for voting and claims to have brought Web3 into the beauty industry, although in essence, the project’s concept could have been implemented without any blockchain technology.
The startup launched in May 2023 — and on their website, you can already buy several products released in this manner, with a range of others already approved and in the pre-order stage.
KIKI World raised its first $3.5 million before launching the platform last year. And now the startup has raised an additional $7 million in investments. Among the investors, a16z crypto and the investment arm of the cosmetic company Estée Lauder are notable.
What’s Interesting
The founders of the startup claim that in the $500 billion beauty industry, it’s not the brand manufacturers that play a central role, but the buyers who purchase all this goodness 😉
However, brands only force buyers to pay them without giving anything in return — neither the ability to influence what brands are going to produce nor rewards for buying their products.
Meanwhile, brands spend $75 billion annually to first “roundaboutly” study their potential consumers and then advertise to them what they’ve produced as a result of such demand research.
Moreover, the cost of acquiring customers for brands has increased by 80% over the past 3 years, as customers have become less responsive to ads. Because people now spend 40% less time on social media — where they pay more attention to influencer opinions rather than direct advertisements.
KIKI World believes that it’s time to, first, get rid of the “roundabout ways” — directly connecting producers and buyers. And second, to do this within the framework of a community (social network) — where people can suggest, express themselves, and discuss. As the startup claims, “Commerce goes better when it happens in a community” 😉
Within the community, users can watch stories of other users using products, vote for ideas of new products, receive product samples, participate in online events, and prize draws.
It’s not excluded, by the way, that users may receive product samples not just for nothing, but in exchange for points earned on the site. This would be logical because giving out samples to freeloaders everywhere would be a waste of money 😉
The startup, by the way, is already trying to identify active community members since, with accumulated points, they can buy not only products and souvenirs but also access to the closed group of “super-users”. I hope they’ve implemented it on a subscription model — where users need to constantly do something on the site to earn enough points to continue paying for the subscription to this group.
Once upon a time, one of the organizers of a popular internet forum told me that the “badge system” for merits is a fundamental point for maintaining the stability of the community. New community members should want to earn badges, old ones should brag about them to newcomers, and also want to earn new ones to boast to other old-timers 😉 And this cycle should be endless.
The startup generally prioritizes communication between users. Because a strong community is a community where strong horizontal connections between users appear and strengthen. And it’s these connections that prevent the community from falling apart, they keep each of its members in the community — and not just one or a few gurus broadcasting to a silent audience 😉
In November of last year, I wrote about the Off/Script startup, which made a similar platform (by the way, without blockchain) for the fashion industry. On it, influencers also suggest products, users vote for them, and the startup engages in the production and sale of products that have garnered the required number of votes. This startup raised $7 million in investments in its very first round.
Where to Run
Producing goods under their own brands at third-party factories has ceased to be a problem. It’s not for nothing that in recent years, the number of such manufacturers (D2C, Direct-To-Consumer, directly to consumers) has been actively growing.
The problem, as usual, is not in production but in sales. KIKI World, Off/Script, and similar startups create an environment in the form of communities of potential buyers — where you can first find out what they need and then sell it to them 😉
A pioneer of a similar model was once Kickstarter. But now it seems that this model can become mainstream in many areas:
Firstly, the number of brands with similar products is increasing significantly, and competition has shifted from the level of product properties to the level of the audience.
Whoever gathers more audience will sell more. However, it’s quite difficult for each brand to gather its own audience — it’s easier to go where such an audience is already assembled. In many ways, this is similar to the choice of internet sellers — a) create your own store on Shopify and build an audience, or b) go to a marketplace like Amazon or someone else’s. KIKI World and Off/Script are analogs of marketplaces but operating on a more “creative” model.
Secondly, people have indeed started buying more based on recommendations in social networks than on regular advertising.
And this means that for successful sales, you need to create not just a Kickstarter but a social network with all sorts of bells and whistles. Which is exactly what KIKI World and Off/Script are doing.
Thus, the direction of possible movement is towards creating similar communities in selected product categories.
Which product markets are large enough in volume? Where are there already many D2C manufacturers, proving the simplicity of production under their own brands and their demand? Where is the purchase frequency high enough to ensure the constant activity of community members?
Such startups began to appear not so long ago. And this means that the topic is still new enough to get into. But these models clearly show promise — otherwise, a well-known cosmetic company like Estée Lauder and a well-known venture fund like a16z wouldn’t have invested in today’s KIKI World. So, it’s worth a try 😉
About the Company
KIKI World
Website: kiki.world
Last Round: $7M, 09.04.2024
Total Investments: $10.5M, Rounds: 2