A UCalgary grad student in economics turns favours for her friends into a cosmetics business.
Before she started her MA in economics in the Faculty of Arts, Jade Hu went back to China for a year and started selling her friends cosmetics she’d pick up in Hong Kong. Now Hu is spending the summer turning the little favours she did for friends into a business.
With the help of the Summer Incubator Program at the Hunter Centre for Innovation, Hu is developing the JadeHuBox, a small cardboard box containing a few makeup samples to sell in China. “I couldn’t think of another name so I just named it after myself,” says Hu of her new brand.
Her parents live in Shenzhen, near Hong Kong, and when she was back she was able to go to the island once a week to shop. “When I went home, I realized I had all these friends who really want these cosmetics,” says Hu. “They were living in mainland China and they can’t really get this stuff.”
It’s common practice in China to ask friends abroad to hit up the cosmetic counter and send them a list of products. “The top things they ask to buy are cosmetics, skin care, fragrances, that kind of stuff,” says Hu. “And even though the price is marked up, it’s still a lot cheaper than what they can get inside of China.”
Her initial business idea for her ENTI 785 class in the Haskayne School of Business was a little different — more of an online store to sell products back and forth between China and Canada. But then she told Derek Hassay, RBC Teaching Professor of Entrepreneurial Thinking, about her friends back home looking for cosmetics. And he suggested a subscription box, where you sell a bundle of cosmetics every month and simultaneously introduce customers to new products.
“Jade has been test driving this concept for a while and has already done a significant volume of product sales,” says Hassay. “The idea is to be able to formalize and commercialize what has, to this point, been largely a hobby. However, with her market knowledge, language skills and sales experience, she really has the potential to capitalize on a significant business opportunity.”
Hu’s crunched a lot of numbers, forecasting an 18-per-cent profit margin by charging up to $50 a box. She’s found inexpensive shipping, and her cash flow looks good because customers pay up front for their eye shadow, mascara and lip liner.
“I want to have about four or five mini samples that can create a look — say for every day, for school, casual or for dinner,” she says. And as well as the physical products, she’s planning to produce videos to put up on WeChat, a popular Chinese social media platform, to show people how to apply the products to create the look.
Hu’s partner in the incubating program is Pachari Detpunyawat, a master’s student in chemical and petroleum engineering. “Startup companies in the beauty sector are very competitive,” she says. “We believe that there is always room for improvement.” The two are testing JadeHuBox in the market.
And Hu’s found she’s also testing her thinking. “I thought about it,” she says. “I was too focused on economics. I should be more creative and do something a little bit different.”