Founded in 2011, Ipsy operates a beauty bag monthly subscription service similar to those offered by current sector leader Birchbox and several other rivals such as Glossybox and, most recently, Play! By Sephora.
Ipsy's impressive and growing success lies, the company claims, in its keen awareness of the possibilities of social media, and of how to exploit those opportunities: the brand is bolstered by a reported network of '10,000 digital influencers', and was cofounded by YouTube beauty blogging sensation Michelle Phan, whose channel has had more than 1 billion hits to date.
The L'Oreal effect
The Ipsy service has more than 1.3 million subscribers in the US and Canada, and works with beauty multinational L'Oreal, which has reportedly acquired at least two brands plugged by Ipsy in its monthly bags.
L'Oreal has proven itself a rare brand within beauty, able to rise up and monetize the increasing influence vloggers are having on the spending habits of younger generations of beauty consumers.
It recently acquired NYX Cosmetics, a brand whose annual vlogger competition sees it enjoy YouTube views into the hundreds of millions (well beyond the number typical mainstream brands' ad content brings in). The close relationship it maintains with Phan is another savvy move.
Ipsy differentiates itself within the increasingly saturated subscription beauty box marketplace by tapping into a growing consumer urge for communicative brands, the company claims.
“Women are wanting less and less an authoritative perspective. They want something that’s personal, they want to follow someone’s advice who they really connect with,” Jennifer Goldfarb, the company's president, is quoted as saying in the Entrepreneur.
The brand has its foundations deeply embedded in the existing social media activity around beauty, thanks to Phan, and the recent valuation indicates it is trading well off its perceived personal approach and its authenticity in the eyes of its subscribers.