This analysis was first published in SvD Näringsliv, in Swedish, on February 20th, 2024. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

An extremely strong macro trend in beauty and skincare. An extremely well-known entrepreneur. While other companies are fighting for survival, cosmetics brand Caia is swimming against the current. Rumours of a sale are circulating once again.

“Beauty is an experience — and people are obsessed with sharing experiences.”

Emily Weiss, the founder of beauty brand Glossier, is on stage in Las Vegas. The year is 2018, and an attentive audience wants to know how she managed to break into the fiercely competitive beauty industry from what seemed like nowhere — and with a brand that started as a blog.

Weiss goes on to offer an insight that sounds simple, but would go on to define the coming wave in the beauty industry: “People look to other people rather than experts when they are in the discovery phase.”

The years that followed were tough for brands that, like Glossier, sold their products directly to customers. It was called DTC — “direct to consumer” — though a less euphemistically inclined person might simply call it mail order.

Selling direct had long carried low status, but DTC brands turned that perception on its head. Via pastel-coloured ads on social media, you could now buy everything from frying pans to razors straight from a tidy website — and have it delivered to your door. This allowed companies to cut out middlemen and control the customer experience from start to finish.

There was just one problem with the DTC model: it rarely made any money.

Companies like Away (luggage), Warby Parker (glasses), and Allbirds (shoes) raised billions in venture capital to build their positions. But as marketing costs climbed, growth began to slow. The pandemic disrupted the supply of both raw materials and products, and the companies suffered further. Allbirds went public in November 2021; its share price has since fallen more than 96 percent.

There are, however, companies going entirely against this trend. One of the strongest examples in Sweden is Caia Cosmetics — the beauty brand with Bianca Ingrosso at its helm, which is now rumoured, according to Breakit, to be up for sale. The company has not commented on the rumour.

Caia Cosmetics is also a DTC company. But unlike many others, it is both fast-growing and profitable. Its operating profit for 2023 is reported by Breakit to be just under 200 million kronor. Since 2020, Caia has been 60 percent owned by private equity firm Verdane.

What has Caia managed that so many others in the industry have not?

The first factor is an extremely strong macro trend in beauty and skincare. Interest is reaching ever younger age groups, with eleven-year-olds now requesting face creams as Christmas presents. The category has expanded to a broader audience while also becoming more sophisticated. On TikTok videos, people discuss multi-step skincare routines — and therefore many different products. More people are buying, and those who buy are buying more.

Cosmetics follow the same trend. The phenomenon of “GRWM” — “get ready with me” — is huge on TikTok. It consists of videos in which young women show how they apply their makeup while talking about their lives. The hashtag #GRWM currently has over 10 million videos. The way cosmetics and skincare are used has become a kind of content that does not primarily aim to sell products — but it takes no great leap of imagination to believe that it does so indirectly. Makeup has become entertainment.

The second factor is harder to replicate. It comes down to Bianca Ingrosso herself — an extraordinarily well-known influencer and now entrepreneur, who entertains audiences both through her own social channels and on a talk show on television.

Caia has four founders, but if you ask who is most associated with the brand, the answer is unambiguous. Bianca Ingrosso is Caia — whatever goes on behind the scenes. Ingrosso’s position in Sweden is formidable, and so Caia’s position is too.

A clear illustration of this was the enormous queue that snaked through central Stockholm when Caia opened a pop-up store at NK. Part of the explanation was that Bianca Ingrosso was there in person. But even afterwards, young women have loyally queued to buy the products.

Attaching a well-known person to products is a familiar and well-proven approach. American Kim Kardashian’s clothing brand Skims was valued at over 40 billion kronor last summer. Products from both Caia and Skims may well be good on their own merits — but it is the association with the individuals that allows them to break through the noise in the first place.

As Caia Cosmetics is now rumoured to be approaching a sale, it is easy to understand why there would be many interested parties. The question is whether a new — likely industrial — owner will take Ingrosso on an international expansion. Or whether Caia is now strong enough to stand on its own feet.

Either way, a new billion-kronor company has been built in Sweden — in a category that is often underreported and misunderstood. Hopefully, this much-talked-about deal will put an end to that.