Southeast Asia’s rising social commerce in the beauty industry, Raena: new business model and continuous improvement for their resellers

May 21, 2021

Raena, Indonesia-based social commerce platform for beauty products, is one of the newest additions to Alpha JWC Ventures’ continuously growing list of portfolio companies. They provide a catalog of beauty products, consisting mainly of Japanese and Korean brands, and they become the representative of these brands to enter new markets in which Raena operates in, such as Indonesia.

Founded in 2019, Raena initially operated with the vision to create beauty brands with the top social media influencers. However, after reviewing the trends, they decided to pivot to social commerce in 2020, focusing on the sellers who are ordering batches of products from Raena and reselling it on social media and e-commerce platforms such as Instagram, TikTok, Shopee and Tokopedia.

With this new business model, Raena’s resellers could pick the items they want to sell on their social media and online store accounts without having to carry inventory. Should they attract a customer, the reseller could order it from Raena who then would ship it directly to the buyer. This model gives easier access to launching small businesses and allows Raena’s resellers to make higher margins because they wouldn’t have to buy their own inventory.

Since their pivot in 2020, Raena has met with 50x growth of monthly revenue, and continues seeing a double-digit growth month on month. Additionally, their platform now has more than 1,500 resellers and claims 60% seller retention rate after six months using Raena.

Sreejita Deb, Co-Founder and CEO of Raena, factors in several aspects to the company’s growth, namely the increase of online-based transactions during COVID-19, how the pandemic has driven people to find additional earnings, and how people have been spending more time online while staying at home, especially on the social media platforms most of Raena resellers display their products at.

Aside from that, Raena’s focus on skincare products has also brought great results to their sales. Although there have been many industries that took a hit due to COVID-19, including cosmetics, skincare products have proven themselves to be resilient.

“We saw [that] skincare had higher margins, and there are certain markets that are experts at formulating and producing skincare products, and demand for those products in other parts of the world,” Sreejita said.

She also mentioned that most of Raena’s resellers are selling their products to customers they don’t know, in lieu of selling it to their first connection, such as friends and family; this is how Raena differs from other social commerce. Many of their resellers are people who already have social media accounts focused on beauty products and known for being knowledgeable about it, providing ease to gaining the audience’s trust and catering to their needs.

In the future, Raena wishes to build tools that will help simplify the order management process and to strike direct deals with manufacturers to increase profit margins for resellers. Going forward, they plan to expand their internal team and prepare to enter more Southeast Asian markets.