Reinventing The Beauty Business
3rd January 2017 Paul Andrews
Started 30 years ago, Luxasia is Asia's leading distributor and retailer of beauty products where two of the founder's children have now taken on roles in the family firm.
Luxasia has a string of joint ventures with some of the world’s biggest beauty companies, including LVMH, Coty, Elizabeth Arden and Yves Rocher. The company was started 30 years ago, and now two of the founder’s children work in the firm – his son Alwyn, and his daughter Sabrina.
Sabrina Chong started out practising as a lawyer at Baker & Mackenzie but after several years in corporate law, she wanted to expand her skillset into finance. Juggling work and study was already tricky with the long hours as a corporate lawyer, but she wanted to learn the ropes of the business. So when her father offered her the chance to work in the family firm, she agreed and split her time for two years between work at the law firm, the family business and getting her Masters in Accounting. After the two years, she fell in love with the beauty industry and decided to join the family business full time to expand the business.
Some family firms are finding it a challenge to adapt and change and embrace the potential of digital technology, but you can’t say that of Luxasia. “We are constantly reminded that we needed to be insecure, especially in a fast-moving consumer goods market like beauty products. Digital is transforming the business model of our industry, and especially the role of the distributor. We have a huge advantage being located where we are because it gives us access to many dynamic markets. Not just China but India and the rest of South-East Asia. We offer international brands a proven platform to reach these consumers who are avid for their products."
"That said, the old style distributors in our region are struggling. So if you don’t adapt, you won’t survive. I believe the answer is to integrate either vertically or horizontally, and we’ve decided we have to do both – increasing our platform geographically and integrating downwards, into owning our customers and channels.”
There’s a conventional retail aspect to that strategy, with the upmarket Essentials store chain, but increasingly it’s a digital platform as well. Luxasia has invested in various beauty-related technology companies, strengthened its systems, invested in training and education and upskilled its talent, to enable it to add value to its partners and consumers.
Sabrina believes their family business model has actually helped them make these bold decisions. “Things can move at a faster pace in a family firm – proposals can get debated and approved faster, and the board and management work together as one. The beauty of a family business is the trust you have – the ability to be completely at one with each other. We get the whole leadership team together several times a year to brainstorm ideas and challenge ourselves on the strategy and direction. My father is very open to those new ideas – he’s always up to date with the latest technology, and constantly challenging us to come up with new ways of doing things.”
So does Sabrina see herself taking over from her father one day? “At the moment, the more important task is getting our teams aligned towards where the company is going, and ensuring that we protect our values as we grow. It’s about who’s best for the job, and that might well be an external leader. The company has always been professionally managed and we are upscaling our teams as we push forward with our expansion plans. It’s about meritocracy – that’s the only way the company is going to be a success. You can’t put a family member in a CEO role unless they’re the best person to take that role."
"But am I ambitious? Of course I am, and I want to leave a legacy for my children. But that legacy doesn’t have to be in the form of the business, because who knows what it will look like in 10 or 15 years’ time. The more important legacy is the values we have as a family –that’s the gift we can pass on.”
About the Authors - This insight was part of the PwC global report, The Next Generation of Family Business Leaders which was published in 2016 and has been reproduced with their permission. You can read more of the report here