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How Rosé All Day Cosmetics turned a warehouse fire into profitability

Published on February 7, 2024

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In December of last year, Indonesia-based beauty brand Rosé All Day Cosmetics (RADC) made headlines after securing a US$5.41 million series A funding round led by SWC Global, with participation from DSG Consumer Partners (DSGCP) and the startup’s initial seed investor AC Ventures.

The news came after the company reported 6x annual growth for the year, following a spectacular 4x growth in the year before. To top it off, it also achieved profitability. 

RADC’s growth may continue in the coming years, as DSGCP stated that the Indonesian cosmetics and skincare market is projected to experience double-digit growth until 2026, driven by strong Millennial and Gen Z consumer interest. According to data from the Office of the Coordinating Economic Minister, the market value of both markets should soon exceed US$1.61 billion and US$2.05 billion, respectively.

Not many are aware that RADC experienced an extreme setback after a fire burned down its warehouse in late 2022, destroying inventory and leaving the team doubting how they could manage the company’s cash flow after the incident.

Tiffany Danielle, co-founder of RADC, revealed details of the event and how the company rose to the occasion in a MindShare episode of the Indonesia Digital Deconstructed podcast, along with AC Ventures’ Leighton Cosseboom and Jack Zhang of Indonesia’s new and fast-growing small home appliances brand Simplus.

Lost inventory, distressed cash flow

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Tiffany shared that the incident occurred at a very busy time for the retail business when RADC was just stocking up inventory for the rest of the year. The team loaded hundreds of thousands of items into the warehouse the night before the fire.

To make matters worse, RADC had also launched a new product that was in the midst of a high-profile marketing campaign. When the fire happened, the team had to scrap everything it was working on and redo its social media and marketing campaign strategy from scratch.

“It was one of those tough moments that I think defined our leadership, along with RADC co-founder Cindy Nyoto Gunawan, and strength as a team. It was stressful because at the time I think we weren’t even sure how we could manage the cash flow,” Tiffany recalled.

She noted that the incident showed the importance of having good working relationships with suppliers. After having a meeting with all of them, RADC negotiated better payment terms, which helped the startup manage its cash flow problems.

On top of that, the suppliers also allowed the startup to secure earlier production slots, even amid a busy production time, so that it could replenish stocks in the next one or two months.

Meanwhile, RADC also received support and understanding from its customer community, which sent hundreds of thousands of messages, food, cakes, and more. Tiffany strongly believes this was due to the firm’s strategy to be a community-centered brand.

She said, “It was touching. I think it gave us that push and made us realize to always focus on our consumers, who we create this beauty brand for. That was a little bit of the journey, and we were able to bounce back harder.”

The TikTok dilemma

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Leighton pointed out that “circumstances don’t make an entrepreneur, but reveal her.” RADC proved itself in the face of adversity yet again about a year later when TikTok Shop, a channel where they spent heavily on marketing, suddenly closed.

Tiffany explained, “I remember we got the news a few days before. It was quite a setback for us because the channel provided really fast growth and everything was looking great. The closure made us finish the year not as strong as we’d like to.”

Her team was not that worried at that time, however, as they had diversified RADC’s marketing channels to other platforms. The effect could be mitigated by quickly moving all live-streaming activities to Shopee, which had just begun offering it.

TikTok Shop recently reopened in Indonesia after a blockbuster deal that involved a more than US$1.5 billion investment from its parent company ByteDance to acquire a 75% stake in local e-commerce major Tokopedia. 

Tiffany expressed her optimism that TikTok Shop would have a bright future in the archipelago, as it combines the right shopping experience with social media. However, according to the RADC co-founder, the experience of the newly reborn service has not yet returned to its pre-closure condition. She expressed optimism that it would soon.

Get the full episode on Spotify, Apple, and Google.

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