How Rhode Made Its Mark on the Magnificence World in 3 Years

In 2022, mannequin Hailey Bieber launched a skincare model with only a handful of merchandise encased in unassuming packaging. Three years on, it is being acquired by ELF Magnificence for a billion {dollars}.

The model, recognized for its hybrid merchandise that work as each skincare and make-up, sells solely 10 merchandise. Nevertheless it’s shifting quick available in the market — ELF’s CEO, Tarang Amin, mentioned within the firm’s earnings name on Wednesday that Rhode achieved gross sales of $212 million within the final 12 months.

Bieber introduced the acquisition in a Wednesday publish on Instagram.

“I discovered a like-minded disruptor with a imaginative and prescient to be a special form of firm that believes in massive concepts and innovation in the identical approach that I do and can assist us proceed to develop the model,” Bieber mentioned in her publish.

Amin mentioned Bieber would proceed to run the present after the acquisition because the model’s chief inventive officer.

“On the Rhode aspect, Hailey is a visionary and her distinctive perspective, tenacity, and keenness to reinvent magnificence come by in each facet of the enterprise,” Amin mentioned.

From creating $18 inexpensive luxurious merchandise to constructing a sturdy social media presence, this is what the model did proper.

Representatives for Rhode didn’t reply to a request for remark from Enterprise Insider.

Leaning into Hailey Bieber’s “It Lady” aesthetic

It is laborious to separate Bieber’s model from her — she’s one in every of Gen Z’s iconic “It Ladies.”

“Rhode’s robust resonance with Gen Z and Gen Alpha—due to Hailey Bieber’s ‘it-girl’ affect and viral social media presence—strengthens ELF’s connection to youthful customers,” mentioned Charlie Scott, the founding father of Singapore-based model consultancy Tangible.

Her affect additionally extends to the millennial area, partially due to her high-profile relationship with 2010s pop star Justin Bieber.

“She’s married to Justin Bieber, so she has this bizarre crossover enchantment the place she’s each a mannequin and influencer and related to millennial nostalgia,” mentioned Antonio Fernandez, the CEO of Thailand-based advertising company Related Viewers.

Nevertheless it is not simply who she’s married to — she’s a trendsetter in her personal proper.

Bieber coined the “glazed donut pores and skin” development in 2021 — referring to the skincare routine that helps make one’s seem wholesome, shiny and dewy.

“My commonplace once I go to mattress at evening is that if I am not stepping into mattress trying like a glazed donut, then I am not doing the fitting factor,” she mentioned in a YouTube video on her channel in 2021.

Fernandez mentioned Bieber’s social media recreation has been a difference-maker — notably in how she’s turned skincare routines into viral content material items that transfer product.

The “glazed donut” development, as an example, has since impressed “glazed donut nails” on TikTok and the viral $20 Strawberry Pores and skin Glaze smoothie at Erewhon.

Not making an attempt to be every part to everybody

And the packaging issues, too.

Scott mentioned Rhode’s model language of minimalist packaging, mushy lighting, and the dewy “glazed donut” look reinforces Rhode’s id and units it aside from extra maximalist, or color-focused manufacturers.

Rhode sells solely 10 merchandise, the majority of that are skincare-focused. These embrace a cleanser, lip balms, blush, moisturizer, and others.

The product packaging is as restrained because the product choice, with impartial grays, beiges, and browns.

“This minimalism, paired with inexpensive pricing and ingredient transparency, instantly tapped into the ‘skinimalism’ and ‘Clear Lady’ tendencies well-liked with Gen Z and younger millennials,” Scott added.

Teng Chan Leong, the CEO of Skribble, a Malaysia-based advertising company, mentioned Rhode had distinguished itself by not “making an attempt to be every part to everybody.”

“As an alternative, it is nailing one class with cultural relevance and quietly constructing model fairness,” Teng mentioned.

Inexpensive costs

On one other entrance, Rhode’s merchandise additionally land within the candy spot of inexpensive luxe, the branding consultants informed BI.

Teng mentioned Rhode presents high-performing skincare at accessible worth factors. Its hottest merchandise, the Peptide Lip Tint, retails for $18, whereas its Pineapple Refresh cleanser goes for $30.

“In an age of rising dwelling prices, Rhode’s affordable-yet-chic positioning provides it a transparent benefit,” Teng mentioned.

“It is that ‘inexpensive luxurious candy spot that Gen Z loves — they need to really feel bougie with out breaking the financial institution,” Fernandez, the advertising professional, mentioned.

“Rhode hit the right worth level – costly sufficient to really feel premium however not so costly that common individuals cannot afford it,” Fernandez added.

ELF acquisition

The ELF takeover might be mutually helpful to each manufacturers — increasing ELF’s choices whereas serving to Rhode attain a bigger client base.

“ELF cosmetics is about $6.50 in its core entry worth level, Rhode, on common, is within the excessive 20s, so I would say it does deliver us a special client set to the corporate general, however the identical strategy by way of how we interact and entertain them,” Amin informed CNBC in an interview.

Scott mentioned Rhode now has entry to ELF’s retail partnerships, together with Walmart, Goal, and Ulta.

“This takeover may assist Rhode transition past its present direct-to-consumer and restricted pop-up mannequin, leveraging ELF’s intensive distribution community and retail partnerships to achieve a broader, world viewers,” he mentioned.

For ELF, the Rhode takeover means an entry into the status skincare class, mentioned Teng.

“They’re shopping for credibility with Gen Z and a approach into the premium market. ELF is thought for affordable drugstore make-up, however Rhode sits in that $20-30 candy spot that screams ‘inexpensive luxurious,'” mentioned Fernandez.

“The $1 billion price ticket truthfully is smart while you take a look at how briskly they grew and the way culturally related they grew to become. ELF is mainly shopping for a cultural second and betting it may flip into a long-lasting model,” Fernandez added.