Revlon, the 90-year-old cosmetics giant, has filed for bankruptcy. This is not because women are not buying makeup and beauty products. Rather,  they have moved on from Revlon. How? The best way to sell makeup right now is to showcase people who applied or are applying makeup in live shows. 

Revlon’s sales lagged over the years and in 2021 fell 22% from its 2017 levels. Shares have fallen more than 80% since the beginning of the year.

With that construct, extremely social media native brands with largely no heritage but in partnerships with influencers and celebrity have become the new category-kings. If you want to look like that queen on TV, buy this makeup. There is no need to waste time checking the Revlon catalog or visiting its website. 

Social media has commoditized the brand and distorted the distribution model. One guy in China sells tens of millions of dollars worth of makeup yearly via TikTok making his channel one of the largest “shops” for makeup in China. He even put more efforts. Kim Kardashian built a $1 billion beauty brand when she sold 20% stake to Coty for $200 million. Her marketing & growth model was powered by social media. 

People, the empires of the future will be controlled by those who influence and control demand, and not those at the supply side. With tens of millions of social media followers, Kim influenced many and built that empire without a single factory, sales team, or warehouse; only her social media handles as other core domains were outsourced. Companies like Revlon got disintermediated in the mix; “if you want to win in the 21st century digital economy, you must control or influence demand, not supply.”

This is the video on the Airbnb piece: If you want to win in the 21st century digital economy, you must control or influence demand, not supply. In the industrial age economy, power went to gatekeepers of supply. Today, the empire builders are those that control demand. This is possible because digital supply is unbounded and unconstrained, making it largely not a factor. Digital utilities like Google, Facebook, and Airbnb which control demand become the new gatekeepers.

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Comment: Yes, Prof. Ndubuisi Ekekwe Social Media Influencers are a major driver of sales in the era. Rihanna is literally sitting on gold with her Fenty brand as she’s one big influencer on Social Media. I guess Revlon was too slow to adapt. Those that can sell value will always be more successful than those that produce value and can’t sell it.

Do you have any suggestions who Peter Obi can choose as a vice presidential partner? Yes: Abdul Samad Rabiu, CON. 

He is the Chairman of BUA Cement Plc. He is also the founder and Chairman of BUA International Limited! I understand that his shareholders will not be happy with my suggestion. But truth be told, it is time for Nigeria to get people who understand balance sheets into political leadership. Obi and Rabiu will be a new beginning for Nigeria.

One of the things I admire about the US university system is the magic that any person can be a president (yes, vice chancellor). Most times, they hire businessmen and women as “vice chancellors” to build the university. That they have not taught a day in a classroom is not a problem: they are there as managers, not as academics.

But in Nigeria, only professors can lead a university and just like that a man who studied crop science and has no clue on what a balance sheet is, is tasked to manage a budget. That budget could have more than 3,000 workers! What does he do? He struggles because you cannot promote a baby to become a CEO overnight. 

A university is a big business and someone with no business experience should not run one, whether he has published journal papers or not.

Peter Obi, leave the politicians and get someone that can rebuild the economy. Of course, this is a wishful illusion for me as that will not happen. (Labour Party politicians will strike for that.)

Dear Tekedia Mini-MBA Members, we will continue our academic festival tomorrow. This week, we hosted business leaders  from SAP and Microsoft. Tomorrow, I will lead a session on business playbooks, crystallizing how you can move from an idea into revenue where the digits hit the bank accounts.

We teach practical business reality and the nativity of Africa’s entrepreneurial capitalism. This is the cambrian moment and empires of the future are being built. Join us on Saturday as we discuss how to begin and take off, breaking the inertia, to turn that idea into a great company.

Tekedia Mini-MBA >> master the DNAs of modern business. Registration continues here