Ju Rhyu’s Hero Cosmetics started with a simple pimple patch, but she’s got plans to build it into a problem-solution empire.
Rhyu, Hero’s chief executive officer, has tackled Amazon and landed in some of beauty’s most coveted retailers — Target and Ulta Beauty, while expanding Hero into new products and categories. This year, Hero expects to do about $140 million in sales, she said, up from $100 million in 2021.
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“The goal is to be the number-one functional skin solutions brand,” Rhyu said. Here, Rhyu shares advice on navigating Amazon, and discusses product discovery and her long-term vision. This interview has been edited and condensed.
courtesy of Hero Cosmetics
What was your background before you launched Hero Cosmetics?
Ju Rhyu: I got my MBA at Columbia Business School. I have that left side of the brain, right side of the brain, so the creative but also the analytical piece. I always thought marketing was a good marriage of both, so I got into brand management. I did my internship at Kraft Foods Mondelez, worked at American Express and Samsung. Samsung is what took me to [South] Korea, and that’s where I used my first hydrocolloid acne patch.
You moved from patches into more traditional, topical skin care. How do you bring customers into the rest of the line?
J.R.: We started out with just one stock keeping unit, which is Mighty Patch, but it’s a new category. Almost 70 percent of people who enter the brand enter through a Mighty Patch product, then about 75 percent of them go on to buy other skus in our portfolio. We’re going first for discovery with this new product category and then when people use it, it really works, and we build the trust. Then, when we do the cross-sell up-sell across our other products, the majority of them go on to buy. We use Mighty Patch as an acquisition engine and then we can really introduce them to some of our other products.
You sell at Ulta Beauty, Target and Amazon. How has your approach to retail evolved since you launched, and how are you thinking about it today?
J.R.: The company philosophy is really around accessibility. In the very beginning, I always felt like anyone who needed effective solutions to acne products should be able to a) afford them and b) have access to them wherever they wanted to buy them. That was a big part of why we launched on Amazon. That’s also a big part of why we expanded to a retailer like Target, and also why we expanded at Ulta. Especially for this category, offline was always going to be as important as online, because sometimes when you have that pimple emergency, you can’t wait the two days for Prime shipping.
This year, the big strategy is around big, bold brand statements in store. With Target, we did our first fully branded endcap in 700 to 800 doors. When you go into an aisle, you’ll see a branded shelf display; we’re going to be doing a lot more education on it. We’re moving around the store: We started in the mini section, moved into specialty skin care, [and] we’re going to have a sku this year in the acne section; we’re going to be in check[out] lane. We’re moving around the store, that’s both at Target and Ulta.
You’ve had a lot of success with Amazon. Do you have any advice for other entrepreneurs looking to build a business there?
J.R.: With Amazon, it’s like having to be excellent at 1,000 things. I would always recommend being 3P (third party) versus 1P (first party). The difference is that 3P, you are the seller of your products on Amazon leveraging Amazon as a platform, versus 1P, where you sell to Amazon almost like a retailer. The big difference between those two is when you’re 3P, you get to control your pricing. That is critical because that’s how we’re able to launch in other retail partners. A lot of them don’t like Amazon because of the pricing problem — if you control the pricing, you have more power.
We do Amazon in-house, it’s always been in-house. That can be a big differentiator for a brand because you’re able to move faster, you have more control. You own the whole experience. As the channel grows, there’s a lot of benefit to having that knowledge in-house. We have one full-time person who is 100 percent dedicated to Amazon, but everyone touches Amazon.
Skin care has been a hot category for several years now. Do you see any signs of a slowdown?
J.R.: I think there’s going to be continued growth in the skin care category. There’s a new brand every day, every celebrity and influencer has their own skin care brand. Sometimes I do think about, what’s that point of saturation. But on the flip side, people have such an insatiable appetite for discovery and new brands and new tips and tricks and products and product categories. At the heart of it, it’s really about self care.
Years ago, when people were acquiring better-for-you food brands, they were all saying that once this movement starts, it won’t stop. And except for that one blip when everyone was eating Oreos during COVID-19, it doesn’t seem like it has. Does a similar philosophy apply to skin care?
J.R.: I was talking to another founder, this is his second or third company, and one of his criteria for whatever company he was going to start was something either around vanity or vice. There’s definitely an argument to be made, I guess because of human nature — we focus on the vanity aspect. It’s probably a safe bet to make.
How has the investment from Aria Growth Partners impacted the business?
J.R.: The money actually was nice. Even though we’re profitable, having that extra money
in the bank helps you sleep better at night. One thing it definitely did help us do is hire our leadership team, a [vice president] of marketing from Hello Products, VP of sales she came from SunBum, VP of finance that came from Service Brands. It gave me more confidence to be able to afford key, important hires.
Hero is five years old. What’s your long-term vision?
J.R.: Seeing what we’ve done in acne care and being this new, fresh voice in the category, it definitely sets us up well and opens the door for us to be more than just an acne care brand. Definitely, it’s possible we will be expanding beyond acne care, probably into other problem areas. We want to build a global brand, so you’re going to see us go into different markets. You’re going to see us in other retailers starting this year but also next year. Truly, I do believe we have the potential to be a $1 billion revenue business, given what we’ve accomplished so far and all the white space that exists.
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