The youngest of the Jenner/Kardashian siblings, Kylie Jenner is a reality TV personality turned businesswomen. Taking advantage of the plump lips that contributed to her rise to fame, Kylie Jenner launched her own cosmetics line called Kylie Cosmetics in 2015.
The cosmetics brand has gone on to experience much popularity and success. When the first three shades of Kylie Jenner’s lip kits were released, they sold out after a single minute due to high demand. Subsequent releases in additional colours have sold out in less than ten minutes. Despite retailing at $29 USD, the lip kits are often resold on eBay at a huge mark-up price, with bids on lip kits going as high as $10,000.
Many items such as concert tickets or valuable antiques are sold at a higher price in the secondary market, but the Kylie Lip Kit phenomenon is a unique experience that combines a status item and scarcity. The high premium that consumers pay for Kylie Cosmetics is attributed to its scarcity in the market, the status that comes along with it, and the high number of beauty gurus and teenagers as consumers.
Scarcity in the primary and secondary market
The selling out of new Kylie Cosmetics products in minutes after a release or restock is a classic example of demand exceeding supply. For marketing reasons, Kylie Cosmetics may be selling limited quantities of their products to create a frenzy around the brand. The buzz generated by the hyped brand can create more interest to consumers in the long-term and lead to higher demand. The difficulty of acquiring a lip kit cements its recognition as a status item. By creating scarcity in the market, Kylie Cosmetics is therefore able to make the brand seem more valuable.
While speed is the key factor which allocates the lip kits in the primary market, in the secondary market, the goods are solely allocated by consumers’ willingness to pay. Many resellers bulk order in the primary market with the intent to price discriminate for profit on the secondary market. Due to scarcity, independent resellers can sell at exorbitant prices on the secondary market. Although resellers profit from taking up more consumer surplus, they may create value by providing product availability in the late market and provide a means for those who are willing to pay more to get the product.
Brand and status
A significant part of the lipstick’s value comes from Kylie Jenner’s celebrity status and the endorsement of her well-known siblings. Beauty gurus and teenagers have preferences for Kylie Jenner’s products because she is a celebrity known for her full lips. There are many substitutes on the market for a matte lip stick with similar formulas, colours and quality. For instance, the products of Kylie Cosmetics and its sister company ColourPop are made by the same manufacturer, Spatz Laboratories. Many beauty bloggers claim that ColourPop’s Ultra Matte Lip liquid lipsticks are the inexpensive “dupes” of the Kylie Lip Kits at a cost of $6 per lipstick. If ColourPop and Kylie have the same manufacturing costs, the $25 price differential between the two company’s matte lipsticks can be attributed to Kylie Jenner’s brand. Avid fans are often willing to pay premiums for products they associate with their favourite figures in entertainment. For this reason, sneaker enthusiasts paid up to $1000 on Kanye West’s limited edition Yeezy Boost sneakers which retailed for $315.
Since consumers are most likely buying Kylie Cosmetics for their desirability instead of functionality, the products are only valuable if they are authentic Kylie Lip Kits. Just like the social stigma associated with having a fake Louis Vuitton bag, a person would perceive their social status to be lowered by the possession of a counterfeit Kylie Lip Kit. Consumers receive pleasure out of buying something expensive just for its brand name and associated status.
Beauty Gurus and Teenage Consumers
Apart from resellers looking to profit in the primary market, Kylie Cosmetics’ customers also include beauty bloggers, teenagers and fans of Kylie Jenner.
Beauty gurus are eager to get their hands on the latest Kylie Jenner products as soon as possible. They attract more views to their social media accounts and blogs by showcasing the products and making use of the Kardashians’ influence. Depending on their review, successful bloggers have the power to increase or decrease the demand of Kylie Lip Kits due to their influence over their own followers.
As one of Time’s most influential teens of 2015, Kylie Jenner has many teenage fans who aspire to look like her. Impulsive and impatient teenagers may have a willingness to buy off resellers instead of waiting for the company to restock or buying a substitute, contributing to high resale prices in the short term. The bandwagon effect is also prevalent; as more buy Kylie Lip Kits, the preference for the brand increases because teenagers may be anxious to look like and use the same products that their peers are using.
It is apparent from the Kylie Cosmetics craze that there has been a strong desire in the marketplace for full lips like Kylie Jenner. The brand’s success revolves almost entirely around Kylie Jenner as a beauty and style icon. Despite the public’s mixed feelings towards Kylie Jenner, there is no doubt that she’s a great opportunist who has fuelled and capitalised on the need for the plump pout.
Image courtesy of http://i.dailymail.co.uk/
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