“What percentage of American men say they don’t even put lotion on their faces?”
It was something I had never thought about. Isn't everyone wearing lotion? How many people don't even wear Neutrogena (Johnson & Johnson's popular cosmetics brand)? I wanted to make a guess, but my thoughts didn't go further. If you don't even put lotion on, your face will pull, but don't my father's generation also use lotion? Are you an alien?
The face of Cardon's CEO Na-rae Jeong (pictured), which makes men's cosmetics, brightened greatly. The tone of voice also increased. “20% based on those who visited the Kardon website and responded to a simple survey,” he said. “20% of those who searched for men’s cosmetics and found Kardon and came with the intention of buying it if it was okay, so in reality, a much larger proportion of American men live without even applying lotion.” It is a start-up that has challenged the cosmetics industry. He grew up in Silicon Valley and now operates in Manhattan, New York. The official website and Amazon sell lotion (moisturizer) and sunscreen, face wash (cleanser), and eye cream for dark circles in a deep blue-green design. The cosmetics market is large, but competition is fierce. There is a strong perception that it is difficult to survive without the marketing of large corporations. I was curious about why CEO Jeong was targeting this market.
◆ “Korean men’s cosmetics trend, going global”
In Korea, even older men often stock up on lotion. From the 1960s to the 1970s, men's cosmetics were released, and in the 1990s, major cosmetics brands launched advertisements for men's skin lotions such as 'Bonin (LG Life Sciences)', 'Odyssey (Amorepacific)' and 'Man with Flowers (Somang Cosmetics)'. result. Younger men are more active. Even if it is not as active makeup as BTS, there is a strong perception that ‘skin care’ is necessary. It is a different story when you leave Korea. According to a Euromonitor report cited by CNN, South Korea's men's cosmetics market was the world's No. 1 until the mid-2010s, and has recently moved to No. 2 after China. Outside of these two countries, not many people put anything other than soap on their face than you might think.
It was this point that CEO Chung, who worked for over 8 years at P&G, an American household goods company, paid attention to. Over the past 30 years, Korean men have come to use more and better cosmetics, and have come up with cosmetics that are well-divided for each purpose. He sees that this trend will surely emerge soon around the world as well.
“He came to the US to receive an MBA at Wharton after working at P&G in Korea and Singapore, but the cosmetics market here was very different from what he had seen in Korea. In the Korean market, there are already too many men's cosmetics brands, but in the US, the market was divided into two categories: products that cost between 50 and 60 dollars each (about 60,000 to 70,000 won) or low-end products that cost around 10 dollars.” The 'middle market' of ~$40 was not formed properly. There was no way there would be no demand. He said that he thought that making a product that people who use Neutrogena products would find if they wanted to use “something a little better” would work. “Korean men already commonly use face wash (cleanser) and eye cream beyond skin lotion, but American men were just beginning to take an interest in cosmetics.”
Is there a special reason why Korean men are more accustomed to using cosmetics? For example, wouldn't it feel dry because of the cold winter weather? Or, wouldn't Asian skin be softer and more sensitive? CEO Jeong said, "There are differences in skin for each race, but whether or not to use cosmetics is a matter of perception." He said that, above all, the idea of getting rid of wrinkles was not strong. “Here, we tend to think of wrinkles caused by the sun, cold and heat as a sign of positive old age and a wise look,” he added.
It was also said that Korean consumers did not feel more skin irritation. “The shaving irritation is much more felt by American consumers. Caucasians have stiffer beards than Asians, and blacks suffer a lot from their curly beards.” During the consumer survey, he said, “There were quite a few responses saying they didn’t shave (because shaving hurts) or they didn’t like shaving.”
CEO Jeong majored in electrical engineering. He liked math and science better than English or Korean, and he decided to learn electrical engineering because he wanted to build a robot. “But he went to college and was more interested in doing business. He did a marketing internship at P&G in the summer, and she fell for this route because she found it so much fun while experiencing consumer research for women's cosmetics SK II.”
Collecting and coding data and analyzing responses was his favorite field. He joined P&G as Brand Manager, where he was responsible for SK II, Gillette, and Olay. “It was really exciting to see that when you do the right advertising, it immediately increases consumer purchases. In particular, I became more attached to the brand manager because he played the role of a kind of ‘small boss’. He decided to pursue an MBA because he wanted to experience more of the global market while in charge of Southeast Asia in Singapore.”
For him, the MBA course was the process of starting a business. Every class was different from practical tips that he had to use right away. After he thought of men's cosmetics, he immediately analyzed the people around him. Jacqueline, a former Wharton roommate, joined as co-founder. He asked male classmates to throw a pizza party, so he proceeded to refine the idea through in-depth interviews.
While working at P & G, he was able to see the evolution of the cosmetics market from department stores to road shops. In Korea, department stores led the cosmetics market until the mid-2000s, and then the market for “mastige (luxury style products used by the public)” like Dr. Jart opened. However, men's cosmetics in the United States are still limited to expensive cosmetics in department stores, and there is no place that leads the market. I thought it would be clear if we brought Korean technology and sold it at an appropriate price.”
The first target market was sunscreen and moisturizer (lotion). “A lot has changed in the past few years, but American men tend to think of skincare as a girly thing. At least, I feel less resistance because my mother or girlfriend emphasizes that I use sunscreen, or because a dermatologist advises me to use it. However, there is a white turbidity phenomenon that makes it sticky and white, so there are many reactions that are frustrating and dislike it.”
However, it took longer than expected. This is because it was regulated by the U.S. Food and Drug Administration (FDA). After completing his Wharton MBA in 2017, he gained experience during this time working in the fresh food department at Walmart. In a way, he had an affair when he was supposed to be concentrating. Jung disagreed. He said, “I wanted to see the growth of e-commerce companies, and in fact, I saw the proportion of fresh food in Wal-Mart growing from less than 1% to eight times over the past two years.” Seeing how quickly the organization is changing has been a great help in having the confidence that I can start a startup.”
◆ "Google search results are men's purchase criteria..Customized marketing"
In the summer of 2019, the first product was finally completed. It was a product that aims to moisturize and block UV rays at the same time by lightly applying without greasy feeling and dull and stuffy feeling when applied. Marketing experience at P&G shone. “Whether it’s Korean or American, men don’t ask people around them when they want to buy cosmetics. Women often ask, ‘What do you use these days?’, but American men search for ‘Best Moisturizer for Men’ on Google. I emailed reporters from men's magazines who appeared when I typed men's cosmetics-related terms into the Google search box, and asked them to try the products and if they liked them, they would feature them in an article.”
This method has had unexpected success. GQ published an article naming Kardon products as the ‘Best Moisturizer’. As interest in Korea and Korean cosmetics grew, Forbes published an article dealing with Cardon. “At some magazines, the response was so good that editors asked if they could send in additional products,” he recalls. Since then, Cardon has been searched for in various media, and sales have steadily increased as social media advertisements have been carried out simultaneously.
It expanded its scope to cleansers and eye creams. In order to differentiate from aftershave, which consumers remember for its strong scent and irritation, the product was developed to have almost no scent or irritation. Sales last year more than quadrupled from 2020, he said. “After COVID-19, the demand for eye cream increased significantly as zoom meetings increased. Because I keep looking at my own face like looking in a mirror, dark circles stand out, and when other people say I look tired, I feel the need to do something.”
“Selling men’s cosmetics in the U.S. is like educating consumers,” said CEO Jung. “American consumers ask a lot of questions. For example, I received an email asking, ‘I exercise in the morning, can I use the cleanser twice before and after exercise? Seriously, I wrote a reply saying, ‘It would be better to wash your face with water when you leave the house and use a cleanser when sweaty after exercising’, and I laughed thinking that this was too detailed. This means that there are many consumers who are not familiar with anything other than soap. There are many people who can’t guess the capacity of something like cream, so I compare it to the size of a coin and let them know.”
It is also a great asset for him to build a relationship with consumers by explaining how much to use the product, how to use it, and when to use it one by one. This is because it automatically learns about consumers' difficulties and becomes the foundation for the next product development and marketing plan. “One in three people are repurchasing a product. Considering that it is a startup, this is a very encouraging achievement.”
The investment industry is also paying attention to Cardon's growth. It received seed-stage investment from Strong Ventures, BonAngel Partners, and Mirae Asset Venture Partners. He said that there was a case where he received a contract within a week of meeting him. He is planning a Series A investment this year.
◆ “To make all products used in the bathroom”
Kardon's products are produced in Korea. This is because “there is no place as developed in cosmetics production technology as Korea, and the unit cost of production is much more reasonable than in the United States.” Korean manufacturers were also willing to collaborate with Cardon to explore the potential of the US men's cosmetics market.
2019 marks the fourth year since the first product was released, and this is an important year for Kardon. This is because it is pursuing new growth strategies such as offline entry. “E-commerce is growing in the United States, but the offline market is still large. Cardon is currently sold mainly on the official website and Amazon, but this year, we are trying to create an environment where consumers can meet Cardon offline, such as men’s department stores and barber shops.”
Body care and hair care products are also planned to be released sequentially. Expanding product categories can lead to shorter consumption cycles, which is essential for the introduction of the subscription model he envisions as the next step. “If a good subscription model is created, consumers do not have to drive to the drugstore for 10 to 15 minutes, and the company can plan growth based on stable sales,” said CEO Chung. “All products used in the bathroom are made with Kardon products. We will give consumers confidence that unification is okay.”
Silicon Valley = Reporter Lee Sang-eun selee@hankyung.com
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