The Oppy’s Spotlight Series exposes Sternies to writers, artists, causes and entrepreneurs outside of our typical professional networks. This month’s article highlights Yu-Chen Shih, founder and CEO of Orcé Cosmetics based in Los Angeles, California.
Born half Malaysian and half Taiwanese, Yu-Chen Shih, 28, grew up in Singapore and was often bullied for her darker complexion. She was put on skin whitening treatments and endless diets since she was eight or nine years old. To many, including her family, she did not fit the traditional beauty standards held in Asian cultures defined by white skin, slim figures and sharp features. She hated the way she looked and felt she was the “wrong type of Asian.”
As a makeup lover, she also never felt accepted by the beauty industry. Not only did she struggle to find her shade and products that addressed her skin concerns, she also found a gross misrepresentation of the Asian community, especially of south Asians who are often left out of the conversation. A former media planner at an advertising agency, Shih came up with the idea of Orcé Cosmetics for a class while she was studying at Pepperdine University. With her father’s encouragement, Orcé became a reality. In 2019, they launched their first product line, foundation. Shih hopes her brand can help redefine Asian beauty standards and become a platform for change.
Some answers have been edited for content and clarity.
What was your first step when you started Orcé Cosmetics?
The very first thing I did was to create the LLC. Prior to that, I had no plans of becoming an entrepreneur. I never thought I had it in me. I also didn’t think I had a cool idea that was worth investing money in, but my dad, who is a serial entrepreneur, thought otherwise. He saw my business and marketing plan that I was using as a coffee table book in my apartment. And he forced me to call an attorney and said, ‘we’re setting up an appointment and going in today to set up your LLC’ – that’s actually how I got into this whole thing.
Then the first thing I needed to do was look for somebody who could help me with product development. I was talking to a few independent chemists down in Southern California, and somebody referred me to the product development consultant I was working with at the time. She helped me figure out the rest of the business and I started working on the formula with her. Once we got the formula rolling, I reached out to a creative agency to design the brand, the logo and the packaging.
You say you’re not VC backed, so how did you get the initial investment money?
I’m fortunate enough that my dad was able to help me with the initial investment. Like any good Asian dad, he’d saved up some money for my graduate education and I decided to use it towards the business instead. As a serial entrepreneur, he feels like I could learn a lot from starting my own business rather than spending the money on graduate school, which I would still love to do down the road when we make money.
So what’s the financial situation for your brand right now? Are you breaking even?
We haven’t broken even yet. We launched in February 2019, at a time that was a little bit challenging. We had about a year to really learn and optimize and then Covid happened. Even though we grew 50% year-over-year, a lot of women, who would otherwise be using makeup on a very frequent basis, are not wearing makeup. Most people are not going out. There’s no need for makeup for social functions. So, I feel like our growth could have been more rapid if not for Covid, but I’m glad that at least we didn’t decline in 2020.
Can you tell me about your marketing strategy? I noticed you guys do a lot of digital and social media.
I used to be a media planner, so I’m really big on using multiple touchpoints to penetrate my consumers’ environment. Partially because of Covid and also in the current landscape, we’re fully e-commerce. And because we’re fully e-commerce, we like to utilize platforms like social media. We are on Facebook for older audiences and Instagram for younger audiences, and we have also been featured in many traditional publications like Vogue and Harper’s Bazaar. We utilize some influencer partnerships too, both paid and organic. Finally, we have some strategic partnerships with other brands that cater to similar audiences, but are more established than us.
Your foundations are obviously at a higher price point. How did you arrive at that pricing?
We completed our pricing analysis in 2017 when we were designing the product. At the time, luxury beauty was a booming category. Nobody predicted that there would be something like a pandemic. That was a time when brands like La Prairie were selling $300 foundations and doing really, really well. So, at the time, we set our foundation pricing not only based on competitive analysis, but also based on the cost of goods. Our foundation does have very expensive ingredients such as pearls from Tahiti, which among the top quality pearls in the market, hyaluronic acid used at clinical levels and the evodia fruit extract, which is extremely rare in this industry. These ingredients combined made our cost of goods quite high, so we priced it according to the industry standard.
In the beauty industry for cosmetics, the markup would typically be 80 to 90%. We priced according to that. However, with the pandemic, I feel that people have been reevaluating their definition of what luxury is. I think even those who haven’t been as affected by Covid, in terms of their income, are starting to look at the way they spend their money differently. I think people are becoming more strategic about how they spend their money. So, since the pandemic, we have moved our production to Taiwan.
Oh interesting. Will that change reflect in the prices?
Yes. We will be relaunching our foundation line later this year. We haven’t publicized this yet, but I do plan on adjusting the price point so I can pass on my savings to my customers.
What was the process of moving your production to Taiwan and how do you ensure quality when it’s so far away?
I hired a new head of product development. He is a chemist by training. Not only is he a cosmetic chemist, but also someone who can figure out the whole process of production.
We were able to find extremely reputable manufacturers in the south of Taiwan. So this process has been seamless and, as you know, Taiwanese people are very, very easy to work with. The only difficulty for us in this process is they have a more limited idea of how to use a lot of our technology, such as Zoom.
Right, right. And what’s the next big step for the company? What’s your next goal?
Our next goal is to expand our inclusivity and diversity. Right now we have six shades, which I’ve recognized is not sufficient to cater to a diverse community. But because I’m bootstrapped, I had to start somewhere. A lot of consumers don’t understand that because they’re accustomed to brands like Fenty launching out of the gate with 45 shades. They don’t understand how expensive it is to launch a product… even to create one shade. There are minimum quantities I have to reach. Most of the time, it’s at least 3,000 units per shade. At 3,000 units per shade, even with six shades, that’s a lot of money. But we had to start somewhere. We’re going to expand the shade range and, with the expansion, we will also be including shades that are not only deeper, but also in-between different undertones that would cater to people of different ethnicities.
Are you still looking for a retailer?
I’m still looking for retailers but I think the current landscape in the beauty industry is not very conducive to inclusivity as much as they’re trying to foster it. They don’t want to pick up a brand that is focused on a certain demographic group that is not white. They say that we’re not inclusive and they say that it’s hard to sell an ethically-focused makeup brand or color brand. But, at the same time, they want to be inclusive. In my opinion, I think that niche brands that serve a specific demographic will be able to serve that group much better than a massive brand that is trying to develop an extra SKU to stay politically correct or relevant.
Last question. What advice do you have for young entrepreneurs?
I think number one is: a lot of young entrepreneurs are worried that they’re not educated enough, not qualified enough or not experienced enough. I definitely struggle with that a lot as a young Asian woman. I’m not Ivy League-educated. I don’t have a graduate degree. I don’t have 10-years of experience at Estée Lauder. I’m somebody who’s very inexperienced in this industry. But I think that my journey is unique and, with my unique journey, I bring a different perspective to the way I do things in an industry that has been stuck on doing things a certain way for a very long time.
I remember when I was at Pepperdine, we had this annual symposium, where very, very high-profile entrepreneurs came to campus and shared their experiences. I remember attending a talk by an entrepreneur by the name of Naveen Jain. He said something that left a deep impression on me. He said, “The best person to disrupt an industry is someone who knows absolutely nothing about it.” That really struck me because it made me realize that I don’t need to have 10 or 20 years at Estée Lauder to create a beauty brand. I’m creating a beauty brand from the perspective of a consumer, seeing all the pain points that a consumer has, and I think there’s value in that. So, my advice is no matter what your background is, your journey is unique and you can use that to your advantage.
Now, more than ever, we can benefit from learning about diverse people, businesses and non-traditional industries and about how to apply our skills in their service. Please contact The Oppy to learn more about how to get involved with any of our OppySpotlight features or if you would like to nominate a person or a cause to be featured in an upcoming article.