The evolving beauty scene in Egypt: MAGNiTT interviews Source Beauty Founder and CEO Lydia Schoonderbeek

Source Beauty, the leading Egyptian beauty e-commerce platform, recently announced its pre-seed funding. With the newly raised funds, the e-commerce startup for locally sourced beauty products intends to deepen its platform capabilities, grow its team, and expand its footprint to regional markets. 

Following this announcement, we caught up with Source Beauty Founder Lydia Schoonderbeek to discover more about this startup, her vision behind it, and her thoughts on the ever-evolving beauty scene in Egypt.

Tell us about Source Beauty, how does it work?

I wanted to change the online buying experience in Egypt, and create a fun and personal experience, catering to a youth-tech minded generation. Source Beauty is the first online beauty portal in Egypt, sourcing the best beauty products in the market under one platform, with convenience. The buying experience is fun, easy to use, and an all in one platform, with a focus on attention to detail with design, packaging, and communications – which we’re used to when buying abroad, but not so much in Egypt. All these aspects of the business have proven to be challenging, but perseverance, setting standards, and hiring the right people make all of this achievable.

My aim was to stock a highly personal selection of the things I have discovered and coveted in Egypt, coupled with informative, unbiased advice on health and beauty. We also offer impartial advice on the range of products we stock. It’s not just about one brand, it’s about pulling out the products that work for you as an individual.  

Why do you place such a big focus on marketing and imagery?

We're building a people-powered beauty ecosystem. It is important to understand that today’s customer doesn’t simply want to be your consumer or to be entertained by you. They want to create with you and to be a part of your growth. Essentially they will do your marketing for you by communicating with each other on social media to spread the word. Across most social media platforms there are 526 million posts a day that relates to the beauty industry. 

Traditionally, beauty brands would motivate their customers by focusing on the things that they didn't like about the way they looked. This mindset has completely changed, it’s no longer based on vanity, but on self-expression, and on how good the product will make them feel.  

The beauty industry has been growing rapidly in the MENA region over the past few years. Why do you think that is?

 The rapid growth of the beauty industry in the region I believe has been down to three key drivers:

1. Fast Fashion: Driven by 'fast fashion' brands, the beauty sector has experienced a transformation similar to what happened in fashion a decade ago with traditional markets. Consumers were more focused on premium beauty brands such as Yves Saint Laurent and Dior. However, in the last 5 years, we’ve seen a shift where consumers are much more open to trying new, smaller, or niche brands. 

2. Social Media: What has driven these smaller, cooler beauty brands? In the past, we have always looked to our mothers, aunts, or even hairdressers for beauty advice. What is different now is the level of uninterrupted access to experts that social media has made possible. One of those people is Huda Beauty, she has transformed and developed the beauty industry in the region. For international beauty e-retailers to attract relevant audiences within the region, they would need to have consumer affiliations of cultural proximity, which is generally difficult to grasp in terms of trends and ‘territorial behaviours’. Social media has created a cultural revolution and a new way of consumerism which has enabled the female consumer to look any way that they want.

3. Technology: With technology advances such as  GPS systems, companies such as Uber have launched in the last  few years within the region. Because of all this tech and mapping, it’s brought with it a surge of new logistics firms that are better equipped to handle the fast pace of e-commerce.

You mentioned technology… this is one area that continues to excel in the region. How important is technology to Source Beauty? 

Online shopping provides lots of data on our customers, their browsing patterns, shopping habits, average spend, and the times that they shop. For example, it’s very common for a woman to make a purchase last thing at night from her mobile phone in bed.

The Egyptian female consumer loves the thrill of discovering a new product, brand, or service, and being the first to know about it amongst her social set. It’s an incredible opportunity for knowledge, empathy, and building a creative platform based on the data. We are seeing 80% repeat customers, and a tremendous increase in shopping during the COVID-19 crisis – I am sure that this will forever change many of the customers’ shopping habits.

Source Beauty is based in Egypt, a country where the beauty industry is slowly rising. What factors do you think have attributed to this? And where do you think the opportunities are for growth?

Egypt’s beauty industry market size is in excess of $200 million and it will only continue to grow. E-commerce has been driving a new wave of consumer appetite which is mostly pushed by social media. Egyptian consumers are looking for representation across a number of beauty categories. This is good news as local brands are listening, and embracing the needs and want of today’s customers. Women want to go 'back to the basics' and use products that help them show off their unique beauty in the way that they feel most comfortable. 

This indicates that the trend towards e-commerce in Egypt will only grow stronger, where the relationship of brands and their customers will lean towards a stronger dynamic in the digital space. We are already seeing customers feeling more comfortable and confident in using their credit cards for online transactions. The most common payment method is cash on delivery, so a lot of customers perceived online payments as a security risk. Yet, this is now changing, and we are seeing this with the increase of online beauty product transactions.

There was a time when purchasing fashion items online seemed like a crazy concept. This is where Egypt is today with e-commerce. We’re still in that mindset, which is, in fact, great because there is so much potential for growth. It makes it so much more exciting to be a part of this wave as a leader that is helping to shape and grow the scene.

Have you faced any challenges being an online-only e-commerce platform?

Today we still get customers asking us ‘where is your store?’. And we’re still having to answer that we’re only online. In a way, COVID-19 has forced consumers to shop online and we are seeing that they’re getting used to the experience, the convenience and are growing in confidence when doing so. It is likely that this will transcend into the post-COVID-19 world. 

Finally, how has Source Beauty progressed since its inception?

Questioning anything and everything. If you’re really going to change the way people think about beauty and that the local products are equally if not better than their international counterparts, you really have to reimagine the entire experience.

Getting brands to get on board with the Source Beauty platform was a brand new idea in the Egyptian market. We had initially launched with 11 beauty brands on board. Today we carry over 58 with more than 1000 beauty products. The barriers of entry have been lowered, creating lots of competitive edge to new independent brands. Source Beauty is all about putting these local brands and their narrative at the forefront and giving them a voice through one platform. 

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The ongoing crisis has placed the Healthcare sector under a microscope unlike ever before. Learn all about the industry’s funding and investment trends in our 2019 MENA Healthcare Venture Investment Report