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The Business Times
Beauty challenge for tech entrepreneur
SINGAPORE) For tech entrepreneur Douglas Gan, peddling beauty treatments is a strange new world.
'This is my first time dealing with commerce, and products for women,' he told BizIT.
Mr Gan may have as deep an understanding of feminine beauty products as the next man, but what he certainly does understand better than most people is online behaviour.
He founded location-based services start-up, ShowNearby, which was acquired three years later by the Global Yellow Pages for $3.5 million in 2010. This followed previous start-ups such as an online forum and a Web hosting company.
His new company, VanityTrove, is a subscription-based service that mails a 'surprise' box of beauty products to users for a monthly fee. The service costs $25 a month, and the company claims the box's contents will be about five times the value of the fee.
Since launching the service in December, the 28-year-old Mr Gan has been up to his elbows in all manner of kickstarting business, from hiring new staff to selecting box designs and packing them himself.
Describing the process, he said that he came up with a way to lay the boxes and their contents in order, so that his team of packers could get the job done quicker.
'It was a headache. We packed about 200 boxes a day for three to four days,' he said, with a laugh. The first two months of boxes were sold out since VanityTrove launched.
He started the business with about $100,000 in angel funding, which allowed him to hire four full-time staff and three part-timers.
The funding is likely to last the first six months, after which he expects to raise another round, he said.
Barely two months since the launch of the service, he is wasting no time in thinking up expansion plans.
The service is open to subscribers in Singapore and Malaysia right now, but he has plans to mail the boxes to Thailand and Hong Kong soon.
An e-shop allowing users to directly buy specific products that they like in the boxes is planned for end-February, and the second to third quarter of the year will see VanityTrove launch a men's box.
Commenting on the speed with which the company is launching new services, Mr Gan said that the world of online business needs constant innovation to ward of competitors.
He expects the clones will come, but that the company will keep ahead of them with premium trimmings such as spending a higher-than-average sum on the box material and having its workers keep a keen ear to the ground for exotic products from Korea, Japan and Europe.
'It's harder to clone this sort of business,' he said, on the droves of Groupon clones that descended soon after the coupon site took off.
'Many group-buying sites have razor-thin margins because of the tight competition. The coupon industry will go through consolidation,' he said.
While he hasn't dabbled in e-commerce before, he thinks this is a good time to be in it. For one thing, consumers are less wary of buying products online with their credit cards.
They are also increasingly savvy about products marketed overseas, thanks to online forums and discussion, so he expects word of mouth to help carry VanityTrove to a larger audience more effectively.
Of course, word of mouth is a double-edged sword, so the company is pouring resources into its 'premium trimmings' in order to court the fickle online public.
'It's easy and fast to verify a company's services these days, just by searching forums or Facebook,' he noted.
Mr Gan: His new company, VanityTrove, is a subscription-based service that mails a 'surprise' box of beauty products to users for a monthly fee
Victoria Ho