ORME has pivoted toward beauty.
ORME, the social commerce app that features Tik Tok-style videos within a shoppable marketplace, is emphasizing beauty as its primary category. This as the Chinese platform’s fate remains uncertain even amidst news reports that the Biden administration and president-elect Donald Trump are reportedly exploring ways of avoiding the proposed Sunday shutdown of the platform.
“We started adding beauty brands to the platform and that will be where we will place our focus going forward,” said Bob D’Loren, chairman and CEO of Xcel Brands. “We think this is a good opportunity going forward.”
ORME launched selling clothing and accessories. “It’s done very well,” said D’Loren, who is cofounder of ORME. “We think there will be other specialist platforms that will succeed and some of the big guys like Instagram, YouTube and Amazon will be the multi-category players.”
Beauty brands Bime Beauty, IDEO, MASAMI, and SHAYDE BEAUTY have joined the ORME platform, which drives higher ROI for both brands and influencers while prioritizing user privacy.
“Social selling is a vital marketing strategy for beauty brands, which must now explore new ways to diversify in preparation for sudden shifts in the social commerce landscape,” said Faisal Ahmed, CEO of ORME. “These brands need a platform that delivers results without the complexities and challenges tied to legacy social media apps. ORME’s user-first approach empowers everyone in the ecosystem—from influencers and brands to everyday users—while upholding the highest standards for data privacy and content quality.”
ORME is targeting the 1,000 beauty brands with reels on Instagram, a segment of the market that is worth about $100 billion in sales annually. ORME expects to do $100 million in sales or about 1% of the total market with 300 to 500 brands in the first year of the pivot. “We’re looking at the price of the products also,” D’Loren said. “The average spend on beauty for U.S. consumers is $100 to $150 annually.”
Retailers such as Ulta, Sephora, Blue Mercury, Revolve, Shopbop, Macy’s, Nordstrom and Bloomingdales control the market ORME is going after.
“The brands are giving 70% of the margin to the retailer and they’re making 30%,” said Ahmed. “They’re making [better] margins on their own D2C sites, but they’re spending a fortune on influencers to get them to their own ecommerce channels.”
ORME gives brands an opportunity to flip the model. “Our user base amplifies content and creates a sale. They keep 70% we keep 30%, and from our 30% we pay the credit card fees and influencers,” Ahmed said.
ORME uses Stripe, an online payment gateway that allows consumers to make payments on their web sites and connects with their bank accounts. Most platforms pay vendors within 60 days, D’Loren said, adding, “Cash flow is a big thing for everybody. We split the payment at the time of the checkout. The difference for a vendor is life and death because they get that payment immediately.”
Users who amplify the content, earn 6% for every sale they’re involved with. Influencers earn a higher percentage through a tiered structure and the money is paid directly through Paypal. It allows influencers to grow their audience and every day consumers who are good at creating content, can make some money, too.
The content created lives longer on ORME. “There’s so much content on Instagram but it goes away in two or three minutes two or three days or two or three weeks,” said Ahmed. “We have a link with Instagram we can pull all their content and they can connect it with their Shopify or ecommerce products and it links as long as they want to let it be on the platform.”
ORME wants Ulta and Sephora and the like to come to its platform as well. “We’re running two things simultaneously,” said Ahmed. “We are very confident and we’re getting positive responses. The onboarding is very simple. It takes less than 30 minutes to onboard. It’s all integration with Shopify, integration with Salesforce and Integration with Instagram. There’s no upfront costs.
“People are looking for new platforms,” said D’Loren. “Once you go video, banner advertising is dead. We feel this pivot will help us build community around the idea of beauty. I’m happy we went through trial and error because other categories had so much friction.”
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