My Beauty Matches - an e-commerce comparison site - tells Pound Sterling Live that the impact of the Pound’s devaluation and a shift in market trends has begun impacting on the demand for products in the beauty industry.
The beauty product industry is worth £17 billion to the UK economy according to Raconteur – that’s £342.90 on beauty and skincare spent by each of us.
Federico Raoul Cucchi, Co-founder of My Beauty Matches, feels that Brexit has forced many players in his sector to start making changes to their business plans earlier than expected.
“We have been working with a lot of foreign beauty brands that want to launch in the UK but now most of these companies are in wait-and-see mode - Brexit has brought a significant amount of uncertainty. Therefore, we are now planning to expand outside of the UK much earlier than we had initially envisioned,” says Cucchi.
Italian born, Federico has lived his adult life in London, working in consumer market research (Kantar Worldpanel) and insights (Procter & Gamble, L'Oreal) for most of his career.
He now manages marketing, product development and operations for My Beauty Matches, a beauty e-commerce site that also offers B2B marketing services. Federico explains how the business came about.
“The website was born out of my co-founder's frustration with finding the right beauty products for her skin. She couldn't find enough information online; most beauty advisors' recommendations were biased by the targets they had to hit that month or the brands they worked for; and finally, it is very difficult to be referred to a dermatologist (via the NHS) and going private is quite expensive,” says Cucchi.
The first iteration of the website was launched in February 2014 and it was called My Beauty Compare - its focus was price comparison across retailers.
The website was rebranded as My Beauty Matches in February 2015, “Although price comparison is still a key feature, we want to champion our free, unbiased, personalised beauty product recommendations as our key selling point” says Cucchi.
The software, which was developed in-house, matches users with their ideal products based on the information they reveal through the quick quiz they have to complete in order to sign up to the website.
The website currently has over 180 retailers on their marketplace with over 3,200 brands and 350,000 products.
Overseas Demand Boosted Following Brexit
The beauty industry has been keeping a close eye on Brexit, and when currency started to weaken Federico reported that the website had seen a significant amount of traffic visiting from outside the UK, both from EU and non-EU countries.
He comments, “After the Brexit vote our website traffic from the US has increased significantly, which is an unexpected, yet positive after-effect.”
Fluctuating exchange rates are a hazard of any online marketplace but essential in determining an e-commerce company’s success, and although My Beauty Matches don’t sell the products they advertise, contractual agreements are becoming costlier.
Cucchi says, “From a cost perspective, yes, our contracts in Euro’s have become relatively more expensive, although from a customer perspective I have noticed changes in the geographical composition of our user base but it's difficult for me to pinpoint it specifically on currency fluctuations.”
However, Cucchi feels that Brexit may cause more harm than good for the wider UK marketplace.
He says, “It goes without saying that if financial passporting will be taken away, apart from the disastrous consequences on the City/Canary Wharf, then there will be less capital available for investment into SMEs. I am also worried about the conversations on having quotas on non-EU workers in companies - this could cap economic growth.”
There is much uncertainty to follow until an-end agreement on Brexit is reached.
However, many, including Cucchi, are questioning whether the government’s task will benefit the UK.
He adds, “I am afraid that the UK will suffer from Brexit. From MBM's perspective, a few of our new recruits were attracted by the fact that we had an international outlook and there was the opportunity of working abroad. How badly will their freedom of movement be affected if Article 50 is invoked? As a business based on international products and dealing with suppliers, restriction of movement means more red tape and less ease of travel for important business matters, and it could stop us from attracting the right kind of talent.”
Whilst Theresa May promises for the negotiations for exiting the EU to be smooth, there will no doubt be many repercussions.
But Cucchi also believes there may be a few small gains too, including a reshuffle of its own cities.
He says, “The EU is far from perfect but I think that most of the frustration vented via the Brexit vote actually derives from UK national problems. London has become a bubble too big for its own good and the government should focus more on the economies of other cities and consider developing different centres of business excellence in Manchester, Glasgow, Leeds and Birmingham just to mention a few.”