Buying any new product comes with some reservations as it may or may not work the way consumers hope. That’s why buying products from social media influencers holds so much value. Influencers can make or break a product by recommending it to followers or telling them to avoid it. Raena, a social media and ecommerce startup with a unique business app, recently raised $9 million to pivot the company platform toward the beauty and skincare sector.
About the Ecommerce Business and App
Founded in 2018 in Jakarta, Indonesia, Raena is a social media and ecommerce startup that allows social media influencers to start their own brands by leveraging the company’s platform and app. Shortly after the ecommerce app launched, the startup business noticed customers were using the app to buy the products and resell them on other social media and ecommerce platforms. This led the startup company to shift its focus away from helping influencers create their own personal brands to capitalizing on social ecommerce.
According to the company website, app users buy products from social media influencers, the influencers buy the products from Raena at a wholesale price, and influencers profit the difference. Once the startup company shifted to social ecommerce, revenue grew 50 times last year, has more than 1,500 social media influencer sellers now, and achieved a 60% retention rate on the app.
To date, the startup company has raised roughly $10.8 million across two different funding rounds. The majority of that amount came from the most recent funding round completed by the business for $9 million. The round was led by Alpha Wave Incubation and Alpha JWC Ventures, with other investments from AC Ventures, Beenext, Beenos, and Strive.
With this new funding, the company plans on increasing business staff from 15 people to over 100 in the next few months. The company is also pivoting the app toward the beauty and skincare sector and expanding to Southeast Asian markets. This beauty and skincare app shift comes from Raena resellers setting up shops on other ecommerce apps to sell Raena’s Japanese and Korean skincare and beauty products.
About the Beauty and Skincare Industry
Raena’s shift to beauty and skincare through social ecommerce is an understandable decision as the beauty and skincare industry is enormous, with plenty of opportunity for growth. In 2019, Forbes wrote that the global beauty industry was a $532 billion business. The Asia-Pacific beauty market in particular was worth $120 billion in 2018. Asia-Pacific also accounted for the largest share of the cosmetic market worldwide in 2019 at 41%.
On the flip side, it is also an extremely competitive industry. Business Insider wrote that there are seven beauty companies that own 182 different brands. It can be extremely difficult for new brands to step on the scene since well-known names own the market and customers are loyal to trusted brands and products.
McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.