How Kylie Jenner built a billion-dollar empire


On Monday, the social media “influencer” was rewarded with hard cash when beauty giant Coty announced it was paying $US600 million for a 51 per cent stake in Jenner’s Kylie Cosmetics.

It’s a deal that makes sense for both parties, says John Quelch, dean of Miami Business School. “It is an important rejuvenation for Coty, a grande dame of the cosmetics industry,” he said.

“Kylie brings her social media and digital marketing savvy to Coty. In turn, Coty gives Kylie access to traditional distribution channels worldwide – it’s a win-win.”

Even by the frenzied standards of celebrity and social media, the rise of Kylie Jenner – the younger of two daughters born to Kris and Bruce (now Caitlyn) Jenner – is extraordinary.

She owes her celebrity status to the reality show Keeping Up with the Kardashians, which featured the Jenner girls and children from Kris Jenner’s previous marriage to Robert Kardashian.

Kylie, who was only 10 when she first appeared, was well paid for the 158 episodes in which she featured. However, it was the fashion spin-offs and endorsements that have proved far more lucrative.

She joined her sister Kendall in lending their name to a range of nail lacquers. Then, in conjunction with PacSun, there was the Kendall + Kylie fashion collection sold in upmarket stores such as Neiman Marcus and Selfridges.

Endorsements flowed as Jenner’s social media profile exploded – at the last count she had 151 million followers on Instagram.

It was Jenner’s decision to have lip filler applied to boost her pout that proved to be a game-changer in an already stratospheric career.

“Everybody was talking about it and her lips got a lot of publicity, which segued into the launch of the cosmetics business,” says Lauren Goodsitt, global beauty analyst at Mintel.

“It allowed her to use a somewhat negative story and turn it into a positive. It was a tactic we have seen employed by the Kardashians before.

“Prior to the launch she already had a significant following on social media, so when she launched the collection, it made a very big splash.”

Jenner used $US250,000 of her own money to start the business with 15,000 lip kits – a combination of lipstick and lip liner – that cost $US29. The entire stock sold out online in less than a minute.

In February 2016 she relaunched the company as Kylie Cosmetics, with products made in both China and California. Sales have been astronomical, with revenues of about $US200m expected this year.

“Kylie knows her customers and fan base really well, which is why she is able to tailor it to their needs,” Goodsitt adds.

“Then there is Kris, her mother and manager who has been able to look after her daughters and tailor their businesses to their following.

Kylie Jenner has shown she can move markets.Credit:Michael Nagle

“I think Kris looks after the business side, while Kylie looks after the creative and product development portion of the business.

“Make-up and skincare were authentic to Kylie. She has been able to engage her audience, an audience that trusts her. She is a cross between a celebrity and influencer, which is one of the reasons why her business has been so successful.”

The deal with Jenner provides the boost that troubled Coty needs, says Jane Hali, chief executive of Jane Hali & Associates Investment Research.

“Coty has been trying to turn around its business. The purchase of Kylie Cosmetics gives the firm [access to] Generation Z and the important data learnings that go along with it,” she says. The challenge for established cosmetics companies such as Coty and Estee Lauder, which paid about $US1.45 billion for Too Faced cosmetics three years ago, is to reach younger consumers who are heavily influenced by social media.

This is where Jenner, whose business acumen appears to have eclipsed the rest of the Kardashian clan, comes in.

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“She has an extremely powerful personality and an extremely large reach on social media and in the media in general,” says Neil Saunders at GlobalData Retail.

“Kylie is a great advertising phenomenon in her own right and she is able to reach people and persuade them to buy in a way that large brands, even with their huge marketing budgets, just can’t do.

“She isn’t attached to men in grey suits and I think that is what makes it work.”

Those men in suits might still think they call the shots – but today, their own fortunes can be made or lost from Jenner’s Twitter account.

Telegraph, London

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