Lily Twelve Tree (0:27)

Hello and welcome back to the Bare Faced Podcast, a beauty business podcast hosted by me. My name is Lily twelve Tree. I am your beauty analyst and data science student and today's topic is a funny one. It's a controversial one, and it's the Business of Beauty Duping the title and angle of this story has changed so many times during the process of creating it, as new facts and figures have kind of revealed themselves as I've gone deeper and found some real little nuggets of gold. For those that are unfamiliar, dupes are beauty products that are direct copies of popular products sold at more affordable price points before we stuck into it. We should probably actually clarify the definition. So a dupe is a slang word for a duplicate and it's used to describe products designed to resemble higher end items closely but with a significant smaller price tag. While what dupes are not is counterfeits. Counterfeits are made in exact imitation of something valuable with the intention to deceive or defraud. Counterfeits are illegal as they infringe on trademarks and intellectual property. I like to think of it as a counterfeit is the Louis Vuitton your mum's friend brought back from Bali, while a dupe is the sunnies you bought from Cotton on or Brandy Melville because the shape looks like a pair from Miu Miu that Kendall Jenner was papped wearing. Beauty dupes have been very relevant in the beauty industry for the last 10 to 15 years, but have become a much louder conversation quite recently for a number of reasons, namely how close brands have been pushing dupes towards counterfeits while still remaining legal. The company that has done this most effectively is MCO Beauty. If you're unfamiliar with Emco beauty products, you need to have a look at side by sides of their products with the originals. You can google this or I have uploaded a bunch to the substack post for this episode and no matter how many times I look at these products, it will never fail to blow my mind. The shape of the primary packaging down to the finishes of the lids and the brand motifs and the accent colors. They are the closest thing to being identical without being identical. Emco Beauty is an Aussie brand that's been around for a few years that their founder Shelley Sullivan, who is a fairly prominent character in this story, she stepped down as CEO after selling the business for a figure north of a billion dollars. The company is expected to turn over 330 million in FY25, up from 11 million in FY20. So how do they experience such extreme growth, you ask? They shifted their strategy from Model Co, an affordable drugstore beauty brand, to Emco, a luxe for Less brand that directly replicates trending products and mass distributes them for a cheaper price. So while this topic of duping is so much bigger than Em Co beauty, the dancing on the line between a beauty dupe and a counterfeit is the part of this that I'm most interested in and is what we're going to be looking at in today's episode. Because earlier beauty dupes from I'm thinking particularly the peak YouTube makeup days so mid to late 2010s was about finding the cheaper version of a product that performs the same way. It was finding a cheap lip liner that had the same staying power and had a close to perfect color match as a Charlotte Tilbury lip liner. Only now it's less about how closely the products perform on the face and instead how closely the products perform packaging mimics the popular alternative clearly this conversation is topical because I actually spoke to Mark Whitaker, a senior features writer at Forbes, yesterday for a piece that he's working on about Emco. So I really want to ensure that I have something unique to offer you because I'm well aware of how covered dupes have been in beauty business media for probably the last two years. This topic is incredibly polarizing. People seem very protective over their right to aim co beauty, over their right to affordable alternatives. And this conversation is very layered and I think there's a lot more nuance that is needed when discuss discussing this topic because a lot of this can be true at once and this parts of this story leave me feeling conflicted. And if you stay with me throughout the whole episode, I'm pretty sure you understand what I mean. Like one second you hate them, one second it's clever business. But there is a much bigger piece here that lies beyond the sales figures and growth obviously. Like, how are dupes legal? Many of Emco's beauty products are identical to their competitors. So we're going to start the episode Part one, which is the largest part, is probably going to be about half of the episode. Looking into Trademark Law 101, we're going to figure out what Emco have bothered to trademark themselves. How do they utilize what brands haven't trademarked? How do they think about international expansion? Because trademark law is very regionalized. And then also what are the business costs of all of this? I was able to track down a handful of Emco's factories to get some idea of how they keep costs low and speed up the production release cycles, then part two will kind of shift the conversation, the perspective to look at consumers. Why now? Like I said, dupes have been around forever, but they have never been this bigger business. What about dupes are consumers so fond of? And how does the perspective of dupes between beauty dupes or fashion dupes or homeware dupes differ? And then on top of that, how does the perspective of dupes change on different social media platforms? As we all know, different platforms lean different ways and have different common sentiments. But I think this topic in particular, there is a drastic disparity and it's really quite interesting. And then part three will be the projection the future of beauty dupes, more specifically MCO beauty. We'll look at what the business has said are their next plans. We'll try and understand why that is, what this means for the broader industry. And then finally, I usually don't do any kind of scaffolding for conclusions, but I've done a little bit because I have a bit of a contradiction in my pocket, which I think is only relevant at the end. But I will just kind of tie it all off on my interpretation of what I have found through doing all of this research and what I think it means for the future of the industry. But without further ado, let's get stuck into the legality of beauty dupes. How are dupes legal? It is the most common question when we talk about MCO beauty dupes particularly, and for good reason, because when you see a lot of these products side by side, it's pretty unbelievable. And a lot of comment sections are filled with people going, why don't Charlotte Tilbury sue? Why don't Dior sue? And the answer is entirely to do with trademarks, which is an area of intellectual property law, commonly known as ip. And the easiest way to explain the legalities of dupes is through the two instances of Em Co Beauty being sued to help us understand what is allowed and what isn't allowed. So the first time was by Tarte back in 2021. Tarte alleged that Emko Beauty had copied its shape, tape, concealer packaging. And for those that are unfamiliar with this insanely popular product from the peak YouTube makeup era, it was so trendy back then that it is still a bit of. It's a cult classic and it's very much a hero product of Tarte cosmetics today. But as we will find through looking at Em Co Beauty, they dupe everything. I would assume that their best sellers are the things that are most popular and trendy online at the moment. But they do not shy away from trendy products that are already affordable or trendy products that were trending 10 years ago. Anything that could be found on the Sephora's bestseller page, which I actually did an entire analysis of over on substack last week. But anything that a company has spent a large portion of their time and marketing budget and it's a hero skew, right? So any brand that has that level of customer loyalty MCO are after. So to describe to you the packaging of the Tarte shape tape concealer. It's long and cylinder, it twists off at the lid and you pull out really large super sized Doe foot applicator. This is now a fairly popular vessel for foundation and concealer. But it definitely wasn't when Tarte's concealer rose to fame. And it's not the vessel itself that Tarte was bothered in because of this. They don't own that. Right. And it's anyone could use it. They were just the first to do so. It was actually the chevron pattern on the lid of the tube. It's important to point out that it was the chevron detail specifically that they were not happy about because this product would not have looked anywhere near as close to the original as it did without it. Tarte claimed that Emco's Jupe was bordering on a counterfeit and it could confuse consumers. This is the kicker though. This is where it gets really interesting. Trademark and patent expert from the University of Western Sydney, Dr. Sarah Hook told the ABC and I'm paraphrasing because her actual wording was pretty confusing. But she essentially said that if a consumer walks down the shopping aisle and picks up a product thinking it's another, then it is too substantially similar and a judge could deem it is too confusing. However, Dr. Hook said that there's generally no confusion from a customer that they're buying a high end brand when they're shopping at Woolworths or chemist warehouse. And a huge reason why Emco beauty products are legal and can claim that they're not misleading is because of the retailer they sit in. Sure, a cheaper price point and mass distribution just simply makes sense when you're not worried about diluting or undermining the brand. And essentially it allows anyone to get involved with not only financial ease but ease of accessibility which just in turn allows the trend and domino effect to keep going on. And it really facilitates this virality that we see from beauty products online. But Emco's retailer selection was as much about that as it was about being a vessel to dodge trademark claims of being misleading. Ah, it's painfully clever. It kills me because it's such dodgy practice, but it's painfully clever. It is so clever. There are other brands that have utilized this same strategy of ripping off trendy prestige products, making them cheap and then putting them in cheaper retailers. Kmart here in Australia launched oxx. Ox Beauty, terrible name, but they launch a version of Emco Beauty last year and Walgreens in the US did the same thing back in September. Neither retailer stock any of the higher end versions of the product so they can claim that there is no confusion. You walk into Walgreens thinking you're getting cheap product. If we flip the script and look at a prestige retailer, Mecca, for example, they have Mecca Max, which is often compared to Emco Beauty. But it itself could never market itself as a dupe because it would then give ground for the prestige and luxury brands that they are duping that are also available inside Mecca to sue. This is because by walking into a Mecca store you are expecting to find prestige products. So even a brand that isn't stocked at Mecca could claim that that's deceitful. I thought that was so clever. But bringing it back to the Tarte lawsuit, it was settled out of court and Emco were quite quick to change the lid to something that was different from the Chevron. And it now no longer looks at all like the Tarte version, entirely proving Tarte's point. But I would do anything to see the sales of this product pre and post the packaging design change and then to tie this whole Tarte saga off. If you missed it. Back in 2024, the ABC ran a small segment on exactly this. It was titled after being sued twice and Co Beauty has become a multimillion dollar empire built on beauty dupes. And they did a video interview with the founder and now former CEO Shelley Sullivan, who told ABC that in hindsight she regrets changing the Tarte packaging, which is interesting. But the second lawsuit is a bit more fascinating because it was by a brand who is stocked alongside Emco in supermarkets and chemists. Because when I remember when I said that Emco will dupe anything that walks into like anything that sells, whether it was already cheap and already access accessible, they don't care. So the brand was an Aussie brand, Chem Corp, the beauty conglomerate that make the thousand hour eyebrow dye. This product has been around forever and as a white blonde myself, it is a product I was incredibly close to, particularly in my teen years. But the court documents obtained by the ABC allege that Emco started selling its own lash and brow dye kit in 2021 under the name 2000 Hours. The fact that ABC outlined that this was information they found outside of MCO's cooperation is no coincidence because the brand tiptoed around actually saying the name 2000hours in this interview. And that tells us a lot about the fact that this case was a lot uglier than the tart instance. But what blows my mind about this is that outside sitting alongside each other in the beauty section at Woolies, the 1000 eyebrow dye isn't a very trendy product. It's affordable, it works great and it likely sells great. But it was just a bit of a cook to move from Emco. Super professional language for me, but it was just a bit. So ABC spoke to Emco's beauty lawyer, Len Mancini. I am fascinated by how much work Emco must be as a client because we only know the instances of them being sued that were made public and made it to the media. But from the interview, you get the vibe that Len is a bit of a character, which I gotta say, I kind of get. If I was the one that had essentially enabled a business to go from under 10 million a year to over 300 million a year through being a smart ass and knowing the ins and outs of trademark law, I would be a bit of a character myself. But regarding. Come on. Regarding the 2000 hour versus 1000 hour lawsuit, Len said that the 2000 hour branding was simply a case of Emco Beauty not knowing it was being used as a trademark and thinking it was just descriptive terminology, which is just. I'm sorry, but that is genuinely hilarious. I get so wound up by beauty dupes because of this, the smugness of it all. It's this notion that we did it because we knew we could get away with it. And that leaves just a really sour taste in my mouth. The directness of the deceit, I just find so. But I also care far too much about the integrity in the future of the beauty industry. So it can be hard for people that maybe don't care as much as I do to kind of maybe feel that way. It seems to be that they don't share this same sentiment as me. So a parallel could be Taylor Swift's strategy of trying to break the record of weeks at number one on the charts. For those that are unfamiliar, what Taylor does is she releases an album, which of course goes straight to the top of the charts. And as soon as other artists go to promote that they are gearing up to release an album themselves. Taylor and her team know this and they know that it's going to perform and potentially take over Taylor in the charts. So they release the same album but maybe with a different cover or one additional song, but something that is. It's usually completely novel. And I remember when she did this as a response to Charlie X's Brat album and the shameless podcast girl spoke about this and they spoke about how doing something just because you can is a pretty gross way to go about things. And MCO Beauty feels like that to me. I'm not alone in thinking this way. MCO is definitely controversial, but in terms of the general population, they do not seem to share this level of ickiness by the brand. But anyway, back to the 1000 hour lawsuit. It was reported in that same ABC piece that both parties agreed to settle the case out of court again on confidential terms. And Emco Beauty rebranded the product and changed its packaging. Emco Beauty's founder, Shelley Sullivan, said that the company decided not to bother fighting the Kam Cork case because 2000 hour wasn't selling well. But it's just, it's, it's exactly this that I just, I, I can't cope with because you're. As soon as you remove the copycatting, suddenly it's a product not worth selling. And as soon as you can't legally rip it off, you deem it not worth your time. So much so that Shelley told the ABC, in fact, we still have 20,000 units in our warehouse. You would literally rather have dead stock then sell a product that you couldn't make as a rip off. Like that is just wild to me. But anyway. But as I mentioned in the intro, through this research process I was able to track down a handful of Emco Beauty manufacturers. They have one for fragrance, a couple for packaging. But there was one that really blew me away because maybe 60 to 70% of their most popular SKUs were coming from this one manufacturer. Maybe you're wondering, Lily, how can you tell that it was Emco Beauty's manufacturers? And when I tell you that, you can go onto this website and see the exact product. I'm talking the tube, the packaging, the product name, the product weight, the lid, the formulation. It is bar for bar. The only thing that is different is the logo. It is. I'm not actually trying to get sued, so I cannot prove this to you. I'm not actually going to link anyone, obviously, but you need to trust me when I say that they are identical and they are Sitting there being advertised as ready to go to be manufactured by you or I, in theory, you or I could ring up and do a run of these. Not that I actually called up because again, not trying to get sued, but the company actually attends a lot of trade shows, which has made me desperate to get to one this year. The China Beauty Expo, where many popular manufacturers, this being one of them, show their products in Shanghai is in mid May, which is bit too quick of a turnaround. But maybe the Korean Expo in mid September. I might try and attend. But all of the good stuff seems to be in Dongwon, which is just south east of Gwangju. But if anybody has been to any trade shows or any manufacturing contacts that would want to sit down with me and discuss the business of how this works, I would do anything to pay a visit. But the difficulties of owning a beauty formula is really interesting here. Like the fact that Emco haven't trademarked their own products, which says so much of just about the business of beauty. I think because they're able to get away with what they do, because other businesses are the same, they don't trademark the actual formula. And that is something that I was aware of because one of the brands I have worked across, they didn't want to pay for the formula of a popular range of tinted cosmetics that they sold. So each time it came around to manufacturing another batch, they would eyeball it. I'm talking like someone from marketing swatching it on themselves against the older color enough times until it was close enough to match the color that they had made last time. And this whole process blew me away because the color change over two or three runs or throughout the years because of course we had access to all of this product in office, but. But the color after a few years to me at least was incomparable. So I wondered how you were able to do that. How could a customer that, let's say they love the product years ago, they've gone to buy again and they're met with an entirely different color, an entirely different product. And some customers were vocal about how they had noticed, but not enough to justify the incredibly high price tag associated with buying the exact formulas of the manufacturers. And at the time, it was the first time I think I realized the power position that manufacturers are in. The fact that the brand simply cannot exist without them. It's just such a clever business. And it just really, when you think about the business of beauty like that, it makes you realize why when we talk about beauty, we're always talking about marketing. Because that's truly what it is. It's just repositioning of something that anyone can slap their name on, which is crazy. But if Emco don't own any of their formulas, what do they own? So thanks to IP Australia, we can simply look that up. EMCO Beauty have 19 approved trademarks in Australia, at least under the ownership name of mco Beauty Pty Ltd. Because what I found through this process is often you'll have trademarks under like holding companies that are actually like a think of a beauty conglomerate, except it's just the bigger brand above the brand name itself. So Charlotte Tilbury that we'll talk about, they have Illuster holdings, which is the parent company of Charlotte Tilbury Ltd. And its subsidiaries. So it's still just Charlotte Tilbury, but only the trademarks that say Charlotte Tilbury or have literally CT in the logo are trademarked under Charlotte Tilbury. Everything else like Flawless Filter and trademark names like that that don't have literal word Charlotte in it are trademarked under Illustra Holdings. So maybe Emco has more. I've linked the link to where you can see all of Emco's trademarks because that's super publicly listed. And what you can see, which is super interesting, is not only the trademarks that they have, but the ones that they've failed to receive approval for. And so again, that links up on subsect. But where this all gets interesting is that outside owning basic brand names and logo variations, MCO Beauty have trademarked the logo in a circle that is in a straight long line sitting like the circle sits close to the bottom of this kind of line. And it's kind of a bizarre asset to have, which will all mean nothing to most people. Maybe the most single popular dupe Emco has is a copy of Charlotte Tilbury's Hollywood Flawless Filter. This dupe has clearly been so successful, that has actually impacted Charlotte Tilbury's bottom line, which insider confirmation is certainly, certainly the case. This is not just speculation based on that ad campaign, but anyway, on the original of the Charlotte Tilbury Hollywood Flawless filter, they have the Charlotte Tilbury CT logo sitting inside a diamond. That diamond with a CT inside it is a trademark of Charlotte's, but only in the uk. From what I could find, I couldn't find it here in Australia under Illuster holdings, that parent company I mentioned, they had some trademarks, but that CT inside the diamond I couldn't find. But trademark protection is generally territorial, so if MCO used the diamond here, they might be able to get away with it. But there could still potentially be grounds for Charlotte Tilbury to claim confusion. So to be safe, Emco chose the Circle and they also trademarked it. But EMCO filed the trademark a month after launch and it didn't get accepted until October. So they launched the product in April, they filed the trademark in May, didn't get accepted until October. But again, you just, oh my God, the whiplash between being like, that's kind of grim, that's kind of gross. To being like, God, it is clever business. Like, this is what I mean. This story is so nuanced. Anyway, what is interesting to see for MCO Beauty is how they recently, and I mean since like in. Since October, have started to trademark product packaging. In October 2024, they filed a trademark for their packaging of the dupe of Sol de Janeiro's body mists. It was approved just two weeks ago at the end of Feb. And around the same time, they also filed a trademark for their benetint dupe packaging. But that one is under examination. EMCO seem to be required to either provide more information or make amendments. But I do wonder if this is the direction that we're going in that the future of beauty is packaging trademarking. Because like we've said, and we'll kind of retouch on when we talk about the consumer aspect of all of this, people seem less fascinated by how close of a dupe the actual product is. Like the wear time, the color, the pigment payoff. All those types of things that back in the day was how you measured the efficacy of a dupe is like, can I get the same product performance at a cheaper price? Yes. No. Now it's more about just the association of the trend. It's the fact that like you want to be able to participate in trends that you're seeing online that you're seeing influences kind of flaunt that. The fact that it is now more about the visual. I just think that is so fascinating. And like beauty product packaging is something that is. I've made a video about this, so I'm riffing off the top of my memory here, but Ion Design is a fantastic design media outlet. And I remember there was one piece in there by. I believe it was Elizabeth Goodspeed because she is just my favorite. She now works at. It's nice that. But she wrote a piece on how beauty packaging changed with the rise of shelfies. So shelfies are essentially a photo of all your products in your bathroom on a bathroom shelf. And it became more about how a product looks amongst A sea of other products rather than a product in a store when it was sitting, you know, in a gondola that had been designed visual merchandiser and was sitting amongst other products within that same brand and was able to riff off the branding story of the gondola in the. In the paid for store experience rather than now it was about how that product looked in someone's bathroom where there wasn't a control over what products it was sitting alongside. So we just had this huge shift towards pretty packaging which is just so interesting and it seems to have changed a little bit. But still this idea that we you want to participate in the visual aesthetic of a beauty brand over how good the product is is so fascinating. But back to the legalities of all of this. So another legal area I want to touch on is how MCO work with influencers and talent. So something that is a really interesting distinction between the laws in the US and Australia is what is and what isn't allowed when comparing products and advertising. Under the Australian Competition and Consumer Commission, the ACCC Comparative Advertising states that businesses may use comp advertising to directly promote the superiority of their products over another. The comparison may relate to factors such as price, quality, range or volume. Comparative advertising is a direct challenge to who competitors. And before using comparative advertising you should consider is the comparison accurate, are the products or services being compared reasonably similar and will the comparison be valid for the life of the promotion? That last part is really the kicker because what this means is that if MCO Beauty were to compare themselves to Tarte, for example, they need to do independent tests so a cost tarte could easily rock up and update any of their claims that MCO have made to make EMCO invalid. The ACCC addresses this directly by saying consider the duration of advertisements planned and the likely reaction of competitors. If a competitor is aware of a comparative campaign, they may move quickly to change their product or service and this could render your campaign misleading. This means that when EMCO are marketing their product, they spend heavily on influencer partnerships instead so that people outside of the business can make the claims for them, an influencer can say MCO is a direct dupe of Tarte Cosmetics and it's much better value for money. Rather than EMCO saying that and then Tarte goes on sale or EMCO says that and then Tarte prove that they have hydration benefits. Like there's too much at risk for EMCO to say that themselves. So they pay heaps heaps in influencer advertising. I swear they have and they do it well. They do it really well. The way that they've expanded into the US with Pookie and Jet, who are. How do I describe Pookie and Jet? So there are a couple that document their incredibly rich lifestyle. She's Pookie is what Jet calls his wife. What is her name? Campbell. Campbell Puckett. And God, I can't believe I'm talking about Pookie and Jet. But Campbell has always got Birkins on. She's known for, like, she's always drowning in Cartier. So when EMCO expanded into the us, they paid for them to do this whole campaign about Lux4Less and how luxury is for everyone because people adore Pookie and Jet, but obviously their lifestyle is pretty unattainable. And it was a fantastic campaign. It was fucking brilliant that they could get the people that are known for being the most luxury of all to say like, oh no, no, this is just as good. And the visuals were great. Anyway, they do heaps of that. Like their influencer spend would be enormous. But that is the majority of their advertising because it allows them to do this comparative advertising. And if we look to the US though, so in that market where they used Pookie and Jet, these laws are a lot leaner. In a statement of policy regarding comparison advertising, the Federal Trade Commission, the FTC encourages advertisers to reference competitors as long as the comparisons are truthful, clear and not deceptive. They emphasize that industry self regulation should not impose unnecessary restrictions on comparative advertising. The FTC supports brand comparisons when the basis of comparison is clearly identified. And this helps consumers make informed decisions, fosters competition and can drive innovation at lower prices. So remember those Walgreen beauty drupes I mentioned before? They launched again late last year and what blew my mind about them as an Australian is that the name of the product that the dupe is copying is on the packaging. I have uploaded a few of these examples for your reference to substack as always. But they have a dupe of the very popular Paula's Choice BHA liquid exfoliant. And on the packaging for the dupe it says compare to Paula's Choice Skin Perfecting 2% BHA Liquid Exfoliant as both a call out on the packaging and it's in the first line of the product's description online, which is just fascinating. But a double benefit of EMCO investing heavily in influencers is of course like the traditional benefits of working with them, and that is this huge social media exposure which has played the primary role in this brand's growth. So let's pivot the conversation to look at the consumer perception of this brand to understand how is MCO and dupe culture, but mostly emco, growing so rapidly. So part two consumers. The next part of this equation is the consumer perception of dupes. Something I find really fascinating that I mentioned before is the conversations that people have about beauty dupes versus fashion dupes versus homeware dupes and the way that the general idea of fast fashion being bad or now there's this growing conversation around fast homewares being bad, but fast beauty dupes doesn't seem to exist as a conversation in the consumer consciousness. But let's look into that a bit deeper. So in preparation for this episode, I listened to Meredith Rojas, the CMO of North American, and Amco Beauty, on the Glossy Coat podcast. I got about a third of the way in because I just found it quite a hard listen because she went on about how the power of MCO beauty is in community. Community to me is measurable by brand loyalty. And if MCO Beauty had customer loyalty, their best selling products wouldn't be exclusively dupes. Their sales would not be directly associated with the popularity of the original product that they are copying or how close they're able to replicate it if they had community, the model Co products, or the homegrown innovations as Meredith calls them. I also completely reject the idea that anything that isn't a direct rip off is an innovation. But anyway, if they had a community, their skincare line that they launched in non dupe packaging, I would have known about before doing this episode, which I didn't. What the MCO community really is, that they will never tell you, is a very large group of Gen Z consumers who are extremely defensive of their right to cheat beauty dupes. MCO Beauty have positioned the brand as lux for less, as they like to say. And it's this idea of doing doing a hard one by the consumer by allowing them to make trendy products accessible. Again, if we're looking at the sales again, back to the nuances like the sales are huge. It's clearly effective, it is clearly effective. But this protectiveness that consumers have over their right to be able to buy anything they see online I find super interesting. And I I spoke to a popular Aussie skincare creator, Razia Mo, about this and she has publicized her dislike for the brand on multiple occasions. But when I was researching for this episode, I actually stumbled across an ad that she'd made for Amco several years ago and I wanted to ask Razia what made her change her mind. And she said that back in 2022 she saw them like any other jute brand, really like making affordable makeup accessible and in the supermarket. And she really liked that. Like again, I'm not no one is against affordability, but Razia explained that her dislike of the brand started when she tried a product of Emcos and she found the name to be deceptive. It was actually Emco's copy of CeraVe's foaming oil cleanser, which is another very strange instance of them copying an already affordable product. But anywho, she then watched them dupe a couple of small Australian businesses and she said that that coupled with the fact that she was fed up with their terrible shade ranges was when she just decided that she would not work with the brand, not associate with brand, and ultimately was not fond of the brand and happy to publicize that dislike because it's honestly quite hard to do to publicize your dislike of this brand because of this defensiveness. I asked Razia if she thinks if people understood the impact to small businesses, MCO would be as popular and she said that judging from her comment section, yes, she explained that the comments were filled with people saying that look, look at this brand that cares about us and they're making cheap makeup. Although countless other affordable brands exist. And I have to like my comment section has been the same. I've made one or two videos about, you know, just questioning MCO and it being a bizarre business model and I was not met with anyone who shared the same idea as me. But what something is so interesting about MCO beauty is the fact that they are a TikTok brand. That sentiment exists almost purely on TikTok. All topics ever vary slightly between social media platforms, but beauty dupes is crazy. It seems that the more polished the platform, the less in favor they are of dupes. Like if you go on YouTube for the most part there's a lot more people that are critical of the brand. And then Reddit. I've done a Reddit sentiment analysis and MCO Beauty had after analyzing 2000 comments the sentiment was 68% positive. So Reddit are in favor of MCO and it's been interesting to watch that figure change over time. I did a sub stack analysis back in October, maybe it was November of dupes in general, but of course MCO Beauty being at the front runner of that and that number was a little bit less. There has definitely been an uptick towards a favorability towards duping, which is fascinating and we'll look at more in part three. But what I mean to say is that TikTok is the powerhouse beauty platform and it's the least polished of them all. And I think that is where MCO just would not have had anywhere the level of success without TikTok. And TikTok as a platform has played such a fundamentally pivotal role in repositioning fakes and knockoffs and dupes by essentially, TikTok has become a bit of a glorified shopping platform, which I have my own personal frustrations with. But especially in the markets where TikTok shop is available, there's this kind of pride that now is being associated with when people find a cheaper version of something, it's like you're silly for having bought the more expensive version. And again, I partly agree with it. I partly understand the sentiment. But I've. I've referenced this 2020 Vox article by Terry Nguyen so many times, but it's just brilliant. And it's called Trends are Dead. And here, here are a few excerpts of that that I think really beautifully articulate what we're talking about here. So Terry says that TikTok plucks niche digital aesthetics out of obscurity and serves them up to an audience that might not have known or cared in the first place. While aesthetic components were once integral to the formation of traditional subcultures, instead subcultural images and attitudes become grouped under a ubiquitous, indefinable name of a viral trend, something that can be demystified, mimicked, sold and bought. Teenagers, for instance, are accustomed to trying on digital aesthetics like clothes. Also buying fast fashion to represent these tastes, swapping out ones that no longer fit their aspirations, inspirational personality, style or vibe. As a beauty addict myself, I think I've really personally felt this a lot in the extinction of beauty sub groups. The easiest comparison because it's just such a stark difference, but also with enough recency that I think a lot of us can draw reference from is is YouTube. And in 2017 ish. It was kind of like you had, you had Nikki Tutorial, for example, that was going to show you how to do really high coverage looks. Then you had someone like Jackie Aina that were able to speak to Black Knee. Of course these people still exist, but the way that culture has been so flattened are no longer these pockets of interest in the way that again, it's this generalized trendiness or this illusion of a trend that benefit fast fashion companies and direct to consumer brands that make products that aesthetically align with such fleeting fantasies. In the words of Terry Nguyen, for that Vox piece, this flattening of culture has meant that we're all doing the same stuff. It's the same idea of like, you know, this normalization of cosmetic surgery, that we're all going to end up looking the same. Terry says that with the mass decentralization of culture, even while platforms are becoming increasingly centralized, there's no way for a sane person to keep up. The problem is that we're told that we can, we're told we must evolve to keep up or our digital Personas will wither into irrelevance as our style grows stale. And here we all remain trapped in the throes of increasingly meaningless trends. But I think the thing that fascinates me about that the most is that I think fashion communities, which I don't consider myself as much a part of, I think they, they feel that like I see videos of this frustration of us all dressing the same. And even this week there was that conversation going around how people are fed up with NYC influences and really they're just talking about like white rich influences. And people crave that difference. They crave that creativity and craftsmanship. And I think the reason I really struggle with MCO is the way that they weaponize this illegitimate reputation of beauty. Because when those fast fashion dupes are taken to social media, there is this public concern about not only the sustainability part of it, but how that is undercutting the designer's work and talent and how it's stifling the growth of, of businesses. But when it's a beauty dupe, the brand is doing the customer a favor or they're doing you a solid while prestige and luck brand Lux brands are just big and greedy and it just, it polarizes beauty, which I cannot stand because the way that they market is essentially that all these other brands are ripping you off and exploiting your dollar that you've worked hard for, while we can offer you the exact same thing, but cheaper. But sure, sure, like I, I get that there are a lot of big greedy companies in this business, but actually the number of indie beauty brands at major retailers are at an all time high. They're also now being platformed through things like TikTok shop because we have had that huge democr of of content and media allowing for smaller brands to enter the market. But I think when we look at these bigger brands, we're also putting them in one bucket rather than there are big, big brands that are investing heavily into R and D to fuel the innovation of the industry that EMCO will likely come and copycat in years to Come. So while they're preaching at you that they're keeping costs low, that cost is going right back in their pocket rather than brands that are actually spending on taking the industry to new place. And then it's not only this pitting of people against each other and this again, defensiveness, but it's the simplification of what makes a beauty product good. It being cheap, it working. Absolutely. But there's so much more at play here. Like, we've not once questioned their production lines, we've not once questioned their manufacturing, we've not once questioned the sustainability of how much they're producing. They have so effectively market themselves as doing everyone a favor. And that's the other thing that's annoying about when it comes to beauty. Because in fashion, there's kind of a certain dollar amount that if you're spending any less than someone is likely being exploited. And in beauty, it's less. So in beauty, we're talking about significantly larger margins. And I think that's the fallback argument of many of these defensive customers. But if you want great affordable skincare, go buy from Korean beauty brands. As we discussed in the episode on K Beauty, price is driving is fueling K Beauty. And K Beauty is so huge of export for Korea that there are so many companies that are doing it, it drives prices down. That is what good competition looks like. MKO Beauty is not an example of good competition. So it's not that people want cheaper products, cheaper products exist. It's this entitlement to trends. It's now that you, you believe you should be owed a version of everything you see online because we have normalized consuming products at the rate we consume content. And again, there is such a thoughtful discourse on the impacts of fast fashion and the power of voting with your dollar. And then when we get to beauty, it just, it goes all out the window. But rant over. So much for keeping my own opinions out of this. But let's head to part three. Okay? Part three. The business of mco, the future of dupes. So now that we understand the consumer argument, let's get an understanding of the demand for beauty dupes. Where is that coming from? And let's compare that to the consumer growth plans that EMCO has publicized. So Emco Beauty launched into the US in April of 2024 and they went straight into 1800 stores with more than 250 SKUs. That is a cracker of a launch. But this launch was so successful for a number of reasons, like Pookie and Jet again, but namely it was this mass retail distribution. They then go back for more, expanding into 1200 Target stores in January of this year, this time with a bit of a smaller sku count of 100, but they are now in 3,000 stores in the biggest beauty market in the world. The rise of mass distributed brands is really interesting, but also pretty self explanatory, like the cost of living crisis, the ease of like what I mentioned before about the ease of accessibility to allow a domino effect to happen for products to trend online. And then also a response I think to D2C fatigue. And this really took off in Covid when brands like Cerave and Cetaphil were trending but brands that are focusing on the US which has always been the big money break for beauty businesses because again it's just there is no market like it. Oh other than other than China, but that has its own complications. There's no other western market like it. I think talking about the US in the current climate of Trump's tariffs is really interesting though, because MCO Beauty, like most brands, manufactures an overwhelming majority of its products in China, from what I could find at least. And with Trump's supposed 60% tariffs, you'd think this would disentivize the business from focusing on the US but not quite so. Corrine Wolfmayer, an analyst at investment bank Piper Sandler, told the business of fashion that the dupe business, or affordable beauty products in general are pretty uniquely positioned should the supposed 60% tariffs go ahead. She spoke to BoF about ELF Beauty and explained that the cost of the tariff is often split between its suppliers and the company itself, and that in order to protect its margin, she estimates the company would only need to raise its prices by 20%, which sounds like a lot, but when Elf's products are $6, $7, it's not a big lift. But for other prestige and luxury companies, that 20%, that price increase would be significant to consumers. And this is why I wanted to talk about the consumer piece first, because when we get to the business side of things, it's quite scary about duping becoming so popular and normalized that the sleazier the company, the more they're rewarded. And I don't mean to dramatize or exacerbate this, but we're on a fast track to an industry that is void of innovation and that is pretty worrying. I'm not talking about EMCO's homegrown innovation, I'm talking about real R and D spend. If doing good business is so decent advised, who is MCO going to be able to copy if there aren't these other brands out there doing the legwork for them to be able to come in and rip it off. Emco seems to take a lot of inspiration from E L F Beauty and in that same business of fashion piece, BOF quoted the CFO of Elf Beauty, who had said that since the first Trump administration, which saw the 2019 implementation of an initial 25% tariff on Chinese imports, the company has worked to diversify its production, reducing its reliance on Chinese production from around 99% to down to 80%. To offset those tariffs, we ELF had a number of levers at our disposal. We had cost savings with our suppliers, cost concessions with our suppliers. Foreign exchange moved into our favor, he said, adding that the company has increased prices around a dollar or two. It'll be interesting to see if that changes over time because like I said, Dungwon seems to be really the home of all beauty manufacturing and formulating. So it'll be interesting that whether or not this tariffs change either the way businesses prioritize growing in the US I doubt so, unless they actually go into recession and it drastically changes the way that consumers are spending. But as it stands, the US is just incomparable. So whether we'll see this kind of shift away from manufacturing in China is interesting. But Amco also spoke about starting to look at Europe starting to grow in Europe. So I graft Google search volume for dupes in the us, Australia, France, Germany, the UK and Canada. And on first glance I wasn't even going to include it in this episode or reference it on substack because it just it kind of looks like whatever it looks like, search interest is proportional to population. But then I did a few more calculations and it would appear it is not. So to make more sense of this, I made another graph alongside the original line graph and once again it's all up over on Substack. What I did was I found the searches per million people and then I found the searches per million people in 2020 and compared it to the searches per million people in 2025. And this is so interesting. In Germany currently March 2025 it was 250, Canada 282, the UK 313, the US 456. But France 450 isn't that crazy? Anyway, I'll talk about France in a second for context. Australia is the highest. Australia is at 472. But I do not think that it's a stretch to say that EMCO Beauty's dominance is a Key driver in Australia having the highest per capita searches for dupes. Because when we run the same calculations for 2020, that number was only 93. So that is 93 searches per million people in Australia. That is a 425% growth in searches in Australia since 2020. And that is the exact same time period that EMCO grew from 10 million a year to 330 million a year. Of course last year a lot of that success is to do with the, with the U.S. but the U.S. they launched less than a year ago. So that 425% growth just shows the brand's aggressive marketing and retail partnerships like Woolworths and Big W which they dominate, they actually get more sales than Rimmel Maybelline. They outperform all of those, which is crazy. And then also the influencer driven strategy which is actively reshaped as we just spoke about consumer behavior and the perspective of dupes. So if we then look at the US that is the second highest dupe interest per capita. But what's interesting about the US is that it's this sustained growth. Unlike Australia where one dominant brand has led the change, the US jupe market is fragmented. There's Elf has been a major player for years. But then you've also got Amazon and TikTok shop which aren't largely that popular here in Australia. I mean TikTok shop literally doesn't exist, not available. But this could suggest that US jup culture isn't just about one brand succeeding, it's about this larger structural shift and how people shop for beauty. But MCO entering during this period of sustained growth will be really interesting to come back in 12 to 24 months and see whether that that rate of growth has upticked so much as the brand has really focused on growing there. But in the Forbes announcement of the MCO beauty sale to Vita Corp. They mentioned that the next phase of expansion after going bigger in the US is then Europe. And this look at per capita searches of dupes exposes why this is so interesting. Because France rivals the US per capita interest in dupes. But of all of these countries that we looked at, it has experienced the slowest growth in amount of people searching for dupes. So it's still grown 100% in five years. That's not insignificant, but it feels it compared to the 425% growth of Australia. But alongside Korea, the French beauty market is the most fascinating because. What do you mean? The home of luxury in the world, the birthplace of luxury, has the highest established dupe culture. This feels like an antithesis of every stereotype I know about the French. So there's definitely more digging to be done here and looking into France and things like this are very high on my agenda. But I wonder if that's what has made Europe is obviously like huge and it just makes sense in terms of English speaking as being a next stage. But I wonder if Emco are looking at France because of this. And I wonder how you can sell a copycat brand in the home of the birthplace of luxury. I thought that was crazy. But that brings us to, to the end of today's episode. I, I have, I have some parting thoughts and I don't want to give everyone whiplash, but I just want to point out that I don't actually mind Shelley, the CEO. Sorry, the former CEO and founder of MCO Beauty. I do not agree with just about any of her business practices. I do not like her approach or perspectives on removing all ethical considerations from work and her consistent perspective that making money is entirely what business is about. But what I do really appreciate as a massive contradiction to that is her directness when it comes to making money. Something that we see a lot in female founders especially, especially in beauty. But even more broadly, for some reason that's a big thing in tech is that the talk of business about being communities and businesses being family and the purse the purpose of businesses and just to have someone rock up and talk about making a heap of money and then tapping out is it's like really refreshing. And again, I don't support the way she's done it and I think that on the whole it's a pretty weird way to go about life but that take that position that she's in. We so so rarely see a woman sitting in and like let's face it, imco are grimy, but so are so many other businesses which are predominantly driven by men. We're not sitting around picking them apart. And I'll always, you know, make an active effort that when those people appear in those beauty stories I will be just as critical. In fact, I think I'll likely swing the other way and be more critical. But I just want to hold some space. Not a lot, but some space that for what Shelley has built is objectively, objectively an unbelievable business. I personally believe that there are more things important near on your growth. But hey, that's just my opinion. But I think we're existing in a time currently that it's, it's post D2C and it's pre everything being mass distributed like we're seeing this real D2C fatigue where people don't want to spend huge money simply buying into a business that they can only buy online and can't get in store. And you know, the glossier model. But even the way that they're explaining into Sephora and being more readily available is that like as TikTok shop, as Amazon become more and more legitimate places to be selling beauty, that we're seeing this criticism of really expensive products, which I honestly welcome. For brands to make up that margin, they have to sell more obviously. So it's pushing brands to be more mass distributed. I think that's going to be really interesting. When we see more talk of personalized beauty, we see more talk of voting with your dollar. But we still want things to be cheap, we still want them to be good, we still want them to be highly functional. But yeah, hopefully not too many people are offended. Hopefully I've done a decent enough job of kind of, you know, speaking to all the different parts of this because the business performance can't be undermined. It can be questioned though. But if you have any thoughts, please slide into my DMs. I have loved, loved receiving a few more Instagram DMs recently about people that are enjoying the show. So I welcome that as much as I welcome, you know, constructive criticism. If you think there's something I I missed out, I'm conscious that there are people from MCO Beauty that are subscribed on Substack, so if they've listened I I hope you think I've at least well represented the facts. Obviously my personal takes on them are threaded throughout, but this episode more than anything has made me really want to understand beauty manufacturing. It's made me really want to understand, you know, product pipelines, worrying about things on a line, worrying about costs, just understanding more the mechanics of product rather than purely always talking about marketing. Like, marketing is my background and my specialty and I feel like that'll forever be my forte. But ensuring this podcast is able to kind of shine light on those things too. So anyone works in the industry has any ins on anything to do with production and manufacturing, would love to hear from you. Otherwise. Oh please. If you enjoyed it, give the episode a like share it with a friend. Really really helps out the podcast. Follow it wherever you're listening. Again, really really helps out discoverability and reaching new audiences and therefore making it easier to produce more and more of these. So thank you for being here. You can find barefaced everywhere else at the link in the show notes, but LinkedIn and TikTok are kind of the best places to get regular content. I post on both of those almost almost daily, but otherwise I will see you next time. This episode was recorded on Ghana country. I acknowledge the traditional custodians of this land and pay my respects to elders past and present.