Why the pout?
Kylie Jenner nears her first billion
Kylie Jenner is on track to become the world’s youngest-ever billionaire, and it will be a fortune built almost entirely from Instagram – and her lips.
Jenner, 20, of the Kardashian-Jenner American reality-TV family, is the founder and sole owner of Kylie Cosmetics – a makeup company she runs largely from her iPhone X, with the help of her mother, Kris.
Employing just seven full-time staff, Kylie Cosmetics has sold more than $630m (£480m) of lipstick, lip liner, lip gloss and other makeup – with names like Kyshadow and Kylighter – since Jenner founded the business on Valentine’s Day in 2016.
Forbes magazine, which featured Jenner on its cover this week as the face of “the era of extreme fame leverage”, estimated her net worth at $900m. The magazine, which is known for its rich lists, said Kylie Cosmetics is growing at such a rate that she is likely to become a billionaire by the time she is 22 – a year younger than Facebook’s Mark Zuckerberg was when he joined the “nine zeros” club in 2008.
Billionaires are getting younger. The legendary investor Warren Buffett, who is now the world’s third-richest person with an $83bn fortune, did not make his first billion until he was 56, back in 1986. Jeff Bezos, founder of Amazon and now the world’s richest person with $145bn, became a billionaire at 35 in 1999. Larry Page, Google’s co-founder, made his first billion at 30 in 2004, when the search engine was floated. More recently, Evan Spiegel, founder of Snapchat, became a billionaire in 2015 at 25.
Nearly all of Kylie Cosmetics’ sales come directly from Jenner’s social media accounts. She has 111 million followers on Instagram (77% of whom are aged 18-24), is one of the most-viewed accounts on Snapchat, and is followed by 25 million people on Twitter. Such is the weight of her influence that when she tweeted that she was “sooo over” Snapchat this year, more than $1bn was wiped off the firm’s stock market valuation.
Sales are driven higher by Jenner sparking FOMO (fear of missing out) among her fans with warnings that of very limited quantities of her products. Her initial stock of $29 “lip kits” – matching lip stick and lip liner – sold out in less than a minute, crashing the website.
Jenner, who has been in the public eye since she made her debut on Keeping Up with the Kardashians a decade ago when she was 10, said: “Social media is an amazing platform. I have such easy access to my fans and my customers.”
The business is almost totally outsourced. Jenner comes up with ideas for styles, but the products are made by Seed Beauty, a private-label manufacturer that also produces makeup for the company of Jenner’s half-sister Kim Kardashian West, KKW Beauty. More than 500 people at Seed Beauty, which owns the cosmetics manufacturer Spatz Laboratories, work on the Jenner Kardashian brands.
Spatz, which is run by siblings John and Laura Nelson, was sued by L’Oréal in 2016 over allegations that its patents were used in the creation of Kylie Cosmetics’ lip products.
Not only does Jenner not directly make her products, she does not sell them either. Kylie Cosmetics’ orders and sales are outsourced to Shopify, a Canadian online company that also runs shops for Drake and Justin Bieber. Shopify promotes its success with Jenner to encourage other entrepreneurs to skip the boring things such as fulfilling orders and logistics by using its services.
Shopify says on its site: “The reigning Queen of Snapchat. Reality TV darling. Makeup mogul. She’s more than just a famous face –the youngest of the Kardashian clan, Kylie Jenner, has hustled beyond her 19 years, monetising her name
‘I kept calling my mom and said ,“Do you think it’s going to sell? Because I put all my money – I put everything into this”’ Kylie Jenner Kylie Cosmetics founder
and exploding it into a massive cosmetics brand. Kylie Cosmetics entered the IRL [in real life] space for the first time ever, driving lip envy to a fever pitch.”
Jenner also doesn’t have to worry too much about the business’s finances or day-to-day management of her 12 staff (seven full-time, five part-time) as those matters are outsourced to her mother or “momager”, Kris Jenner, who manages all her children’s financial operations – in return for a 10% cut.
Jenner, who used her reality-TV exposure to secure modelling work with brands such as TopShop, said she had struggled to work out what she wanted to do with her life. Then her thoughts to turned to her most talked-about feature: her lips.
Until she finally admitted using injectable fillers for her lips, fans tried desperately to ape her fuller lip look by sucking on bottles in the “Kylie Jenner lip challenge” to increase blood flow to the lips, with often unpleasant results. This week, however, Jenner said she has had all filler removed, after learning to be comfortable with the natural look while pregnant with her daughter, Stormi, who is now five months old.
Jenner trademarked the phrase “Kylie Lip Kits ... for the perfect pout” two years before setting up her company with $250,000 of money she had made through modelling and reality-TV work.
“Ever since I was probably 15 I’ve been obsessed with lipstick. I could never find a lip liner and a lipstick that were the perfect match. So that’s where I thought of the idea that I wanted to create my own product,” Jenner said in an interview with Shopify.
While she had a huge fan base, Jenner said she was scared about sales when the website first launched. “I kept calling my mom, being like, ‘Mom, I’m so scared’,” Jenner said. She said she asked her mother: “Do you think it’s going to sell?’ Because I put all my money upfront. You know, it’s all my money – I put everything into this.”
Now the business is soaring, Jenner, who drives a black Bentley Bentayga (which starts at £162,700), is considering turning it into a family firm. “Maybe one day [I’ll] pass this on to Stormi, if she’s into it,” Jenner told Forbes. Though her mother said selling up is “always something that we’re willing to explore”.
Kylie Jenner’s mother and business partner, Kris – AKA the ‘momager’