Beauty Startup Captivating Hyundai Home Shopping... "Building a Creator Virtuous Cycle Ecosystem"

First Startup to Receive '12 Billion KRW' Investment from Hyundai Home Shopping... "The Optimal Live Commerce Partner"
Sales and Creators Tripled in the Last 3 Years... Overseas Love Calls
Guaranteed Channel Revenue for Creators... Continuing Sell-Out of PB Cosmetics

Demil Beauty Startup Logo.
Photo by Demil

[Asia Economy Reporter Junhyung Lee] The era of one-person media is unfolding. Some famous creators are stepping beyond traditional platforms like YouTube to enter terrestrial broadcasters, blurring the lines between creators and celebrities. This reflects how one-person media has become commonplace and how creators' influence has grown.

As the number of creators increases, multi-channel networks (MCNs) have also emerged one after another. MCNs are a kind of 'one-person creator agency.' Like traditional entertainment agencies, they manage creators' schedules and devise strategies to maximize their influence. They also plan and produce creators' merchandise to generate revenue. For creators with hundreds of thousands of subscribers, content production is often done in teams, and the role of MCNs in the one-person media market is gradually expanding, according to industry insiders.

Dimil building located in Sinsa-dong, Gangnam-gu, Seoul.
[Photo by Dimil]

150 Billion KRW Investment from Hyundai Home Shopping and Others... ‘Live Broadcast Partners’ Rising Rapidly

Demil is a beauty-specialized MCN startup. Hundreds of beauty creators active on YouTube, TikTok, and other platforms belong to the company. At the end of last year, the company attracted attention by securing a Series A investment worth 15 billion KRW. This was a considerable amount for a Series A investment in a content startup, and it was notable that Hyundai Home Shopping and Amorepacific Group?rare investors in startups?participated. Hyundai Home Shopping and Amorepacific Group invested 12 billion KRW and 3 billion KRW, respectively, in Demil.

The investment background lies in the rapidly growing live commerce market. According to the industry, the live commerce market was worth 400 billion KRW last year but is expected to reach 10 trillion KRW within two years. Earlier, Hyundai Home Shopping started live commerce at the end of 2018 through ‘Shopping Live.’ Hyundai Home Shopping’s live commerce sales increased more than fivefold from 5 billion KRW in 2019 to 28.5 billion KRW last year. Hyundai Home Shopping also stated, “We will develop live commerce as the ‘fourth channel’ following TV home shopping, online malls, and T-commerce.”

Dimil employees are preparing for live commerce in the studio located on the basement first floor of the company building.
[Photo by Dimil]

Through the Series A investment, Demil quickly emerged as Hyundai Home Shopping’s ‘live commerce partner.’ Hyundai Home Shopping highly evaluated not only Demil’s affiliated creators but also the company’s planning capabilities. At the time of investment, Hyundai Home Shopping described Demil as “the optimal partner capable of generating synergy in long-term business strategies such as live commerce.” In fact, last month, Demil sold out its private brand (PB) treatment jointly developed with Hyundai Home Shopping through two shopping live broadcasts. Demil’s COO (Chief Operating Officer) Jisoo Seo, who led the Series A fundraising, said, “Hyundai Home Shopping had a strong need for MCNs in its digital transformation process,” adding, “Amorepacific also showed great interest and commitment to nurturing creators.”

Over the past three years, the company has tripled both its sales and the number of affiliated creators. Sales increased from 3 billion KRW in 2018 to 10 billion KRW last year, and the number of creators grew from about 150 to 450 during the same period. Seeing this growth potential, more creators are approaching Demil. COO Seo explained, “There are also many inquiries from creators active overseas,” and added, “We do not indiscriminately form partnerships as we focus on management capabilities.”

Channel Revenue Goes to Creators... “Building a Virtuous Ecosystem”

Demil’s unique management philosophy is another reason creators send love calls. Most MCNs share channel revenue with their affiliated creators at a certain ratio. While they also generate revenue by producing corporate advertising content, channel revenue is essentially the main source of income for MCNs. In contrast, Demil fully guarantees creators’ channel revenue. This reflects the recognition that content created by creators is their own intellectual property.

Seo Jisoo, Chief Operating Officer (COO) of Dimil. He was recently selected as one of the '2021 Forbes Asia 30 Under 30 Leaders.'
[Photo by Dimil]

Instead, Demil has developed various PB cosmetics such as perfumes and lotions together with creators. Demil’s cosmetics have gained popularity centered on creators’ fandoms, achieving sold-out status with every product launch. Last year, the company acquired the eco-friendly cosmetics brand ‘Body Burden Project (BBP)’ and is intensifying its PB business. It closely collaborates with Hyundai Home Shopping on product development, sales, and marketing. COO Seo explained that they aim to lead industry changes by establishing a new business model (BM) based on PB business rather than the conventional MCN business model centered on channel revenue.

The goal of this business model is to “build a virtuous ecosystem.” COO Seo said, “Channel revenue provides creators with a foundation to produce content in a more prosperous environment,” and added, “We believed that not touching this revenue would allow more creators to be nurtured in the industry.”

The company does not intend to limit the ‘beauty’ category to cosmetics. Under the slogan ‘Connecting all the beauty in the world,’ it plans to expand its PB product line to cover the entire lifestyle sector in the long term. COO Seo stated, “Beauty creators do not simply review cosmetics but create content that reflects their own lifestyles,” and added, “We plan to expand our commerce business by increasing product lineups that reflect their values.”

This content was produced with the assistance of AI translation services.