How Beauty Brand Depology Grew to $20M in Ecommerce Sales in 3 Years (Growth Tactics Podcast)


Today’s podcast is part of a new series on Growth Tactics, where we talk to digital businesses that are winning. And dig into what worked and what didn’t.

Our first episode is an interview with Alex Lee, the CEO and co-founder of beauty brand and DTC ecommerce site Depology.

After years of struggle as a small ecommerce site, Alex pivoted to beauty and skin care in 2019. And then grew rapidly to $10M in revenue in ten months. And within 3 years, Depology had grown to $20M in sales.

That’s awesome. I talked with Alex about how they did it. What growth tactics worked? Which didn’t?

It was a fun discussion with quite a few valuable lessons. Plus, it’s great to see one of my former MBA students doing so well.

I summarized my lessons learned in this article. 


Related articles:

From the Concept Library, concepts for this article are:

  • Growth: Hacks and Tactics
  • Innovation
  • Ecommerce

From the Company Library, companies for this article are:

  • Depology

Photo by Christin Hume on Unsplash

———transcription below

Welcome. Welcome everybody. My name is Jeff Towson, and this is the tech strategy podcast from TechMoat consulting today’s podcast, sort of a new segment we’re starting called growth tactics, where we basically look at businesses that are winning in digital.


And we ask, try to figure out how they’re doing it. And these are interviews. So we have a guest today who is Alex Lee, co founder of Depology, which is a skincare brand and a  direct to consumer e commerce site that has a significant specialization in South Korean beauty products, which for those of you who aren’t in this business, have a very good reputation globally.


And Alex and his team who are based in China and South Korea, have built a very interesting business that, as an outsider, appears to be sort of rocking and rolling. So I thought he’d be a great person to sort of have on the podcast, you know, and talk about various things that are working in the area of growth tactics, getting engagement, getting revenue, and also things that didn’t work.


So that is going to be the podcast for today. And let me introduce Alex. Alex, welcome to the podcast.


Hello. Thank you so much, Jeffrey, for having me. Thank you so much.


basically why don’t I just start quickly about a story, like how I got to know. Professor Towson.


So basically I went to Peking University for my master for finance about, let’s say it was 2017. Right. And one of one of my class about finance, investment, value investment, it was, and then Professor Towson was my basically my professor there.


And then he taught me a lot about how to invest.  by introducing different legendary investors like Warren Buffett and Ben Graham, all the way up to people like Tom Barak, which is more modern investors. Right. And then that’s when I found out, okay, even though I’m doing master of finance I’m not really fit for maybe doing investment as a,  as a career, because these people that he taught us.


These people, their qualities, I don’t think I, I didn’t think that I could replicate their qualities as a career. So that’s when I started to really think about starting my own company. But anyways, I graduated from that degree and I went on to work for a Unicorn Chinese startup in the educational technology business for one year.


They asked me to start the Korean business. So that’s, they sent me to Korea, back to Korea and start the business for about a year. Actually didn’t grow that well. So in 2019, May, that’s when I started my own business. So basically I quit my job and the second week I went to learn how to do the e commerce from my college friend  from, from the States.


I, this guy was in Korea, so I went to his, basically his house and kind of learned it for about a week. And the second week I started testing stuff. And what I mean by testing was basically running, I developed my own Shopify website, and then I made my own videos of creatives ads,  and then I ran my own Facebook ads at that time.


And then what was interesting was like. That was my second week of quitting job. And the third week  I started having the revenues.  So in the third week I started having like, I don’t exactly remember, but it was like  the first months of generating revenue, I think I did like 30, 000 in revenue and the second month I did like 100, 000 in total revenue.


So it was like growing really fast. I think I was like if I remember, if I just think about it again, then I think I was really lucky because in 2019, a lot of people really didn’t know what  Facebook could do in terms of growing business. A lot of people still thought it was just social media, you know, where you connect with people and I don’t know, you post funny things and people like you.


Like your post or whatever. But so that was like easily, very, very easy time to grow business through paid ads. That’s when I like started growing in 2019, May. And I did, I started, you know, building, building team in Korea for e commerce businesses.  And for about a year and a half, I just tried making lots of small branded websites  of different issues.


So it was like. I think at one time I started selling pillows and then the next week I would sell like,  I would sell like, uh, hair dye products or whatever. It’s just, it was pretty random. You know, I just, whatever I could, you know, scale the ads, I would just sell whatever, you know, that, that was the, that was the thing.


And then my main market at that point was like just sending to just basically targeting the whole world. And, but mostly I think 60 or 70 percent of the revenue. At that point was in the States, cause that’s where all the money is. Right? So we would run ads. The, basically the process of how it works was we would run ads on Facebooks  and then people come to our website, our Shopify website, and they make the purchase and then our warehouses or just the factories in China, we’ll work with them and let them send the products.


One by one to the customer in the States and I don’t know, in France and all over the world. And obviously it was like a really light inventory models because we didn’t have to purchase any stock that back then. So it was really working well and it was very profitable for about a year and a half.  And then, but obviously there are a lot, a lot of problems too, right?


Because if you.  Basically, if you send your product from China, it’s going to be very slow. It’s guaranteed that you, it’s going to take two to three weeks or even two, like six weeks, you know, no kidding. So that’s why people start to complain a lot. And obviously there is no returning customer. So you’re making good revenue and you’re making good profit, but you’re really not building anything that could accumulate over time as an asset, right?


That’s what I. I realized, okay, I want to, I want to try a brand. And  that was about 2020, you know, and the right, when the COVID started, right. And what I realized the trend back then was that Facebook  CPM, basically like  Ads, running, being able to run ads on in Facebook.  And what I mean by Facebook is Facebook plus IG, right?


Instagram.  And the price was becoming more and more expensive every year.  Probably, I think it was, it was increasing by like 50 percent every year to be able to run ads on Facebook.  So that, that’s when I realized, okay, if I want to do a brand, it has to be  In a niche where you have to have a really high margin so that you can have enough enough space to acquire customers running Facebook ads.


So back then at the beginning I was selling selling pillows. Maybe it was like 30 and then the cost of  the pillow will be like 5, right? So there will be like there, then I will have 25 to acquire a customer on Facebook.  Okay. But that’s, I knew quickly, I quickly, I knew that it’s not going to be enough of a margin.


So I started looking for  a much higher margin products, right? So that’s when I, I realized, okay, skincare would be a great place to start because the people,  people’s willingness to pay for skincare products is much higher  compared to the manufacturing cost of the product. So let’s say one skincare product will be like 5 to produce, but people, a lot of people are willing to buy for 100 or 50 or you name it.


As long as you have, you create the right image and the right right emotion around the product, right, right promises around the product. That’s when I started the skincare brand.  And then it’s not typology. That’s where I started. I, I, It was another brand I started in 2020, and then we were able to grow, grow it really fast.


So we grew, we did about 10 million in revenue in 10 months. Yeah, so we grew really fast, but that’s when a lot of different problems started to come out, right? Because that, that’s also my first time running an actual company, right? And then I had three other co founders at that time. So we had a lot of like arguments and you know when you grow so fast some people Some co founders are willing to grow with the business and others are just not ready yet, right?


So there was a lot of problem so in 2021


Sorry, let me ask you for that, you know, it sounds like you, you know, you obviously got some traction there. When you stitched into beauty products, skincare let me understand that a little bit more. If I look at the Depology website today, I see mostly  skincare products that are with the Depology brand.


So not a marketplace, not a reseller, but. You know, Serums, Peptides, Copper Peptides, I think, you know, various stuff like that. In that first wave of significant growth,  why do you think that happened? Was it just the right product at the right time? Was it something you were doing? I mean, how did you go from, you know, smaller numbers to 10 million so quickly?


Oh, you mean for the previous brand right Oh,


Okay, that wasn’t depology at that point, that was but it was skin care,


was skincare. It was also a skincare brand. Yeah, I think that, that brand, we are on, just on the right? time.  In terms, And what I mean by the right timing is at that point there was a COVID starting, right? So a lot of people were locked up at home, just swiping their phones.


Their phones, whatever all day. I don’t know. They’re supposed to work, but they might be just on Instagram too. Right. So a lot of people were just spending a lot more time on, on online.


that was sales into the U. S. or where were those sales happening?


mostly the U S mostly the U


And it’s, I mean, let me, let me, let’s talk a minute here. Cause I don’t think we’ve really explained. I mean, depology today.  How would you describe it in terms of, It’s value to customers, how customers see it. You know, is it a brand?


Is it a DDC site? Is it just to, I think, give people a sense of, you know, the business this has become after a little, maybe a little turbulence settled down.


sure. So, so the apology started in 2021. So with 2021 June, so it’s been about three years and going  and over time, I think it’s eventually become a brand and that’s how I see it. And that’s, I think that’s why the customers we have a really high returning rate.  And I think it was the process that it took us a lot to build a brand.


So at the beginning, obviously the first year it was just acquiring lots of customers through Facebook ads, right?  So that’s what we did, like, at the, at the first year from  2021 to 2022, but at that point, you know, like the Facebook performance was, performance continued to decrease. And it was lucky that we, we were able to get into TikTok very early in 2022,  mid 2022.


That’s when, when I, you know, I live in Shenzhen, China, and there’s like full of e commerce sellers around here, you name it, like Amazon, or it could be Shopify. These people, they’re, one of the interesting characteristic about them is that they won’t do anything that doesn’t make money in one month or two months, you name it.


And,  and then I talked to these big sellers and most of them just weren’t interested in TikTok. What I mean by TikTok is TikTok US, right? And then they think it was like, Oh, it’s, it’s just some platform where teenagers do the dance. And, you know, there’s, there’s no serious purchase intent in that site, but I was very lucky to meet a big Amazon seller.


Who’s a really good friend of mine. He does, she does about like 300 million in revenue per year. And then she was like killing it on TikTok in back then, like two years ago. Right. And then I just listened to her, her.  Her logic behind of like, why it works so well for her, right? And then, okay. And then I realized, okay, I could try that too.


You know, that’s, and then I immediately went back home and then started just putting, started putting together a team for TikTok, you know, you eventually grow to like 10 people in TikTok,  just doing the TikTok, right? And then we started just our strategy for TikTok was just work, work with a lot of influencers in that space.


And then it was two years ago and, and there’s not much competition in the maybe there were like,  maybe like handful of skincare brands were really seriously working with influencers in that platform.  So that’s the, that means there’s less competition, right? So that means a lot of influencers are just looking for the deals to work with.


Like they don’t, like, they don’t have too many sponsors and they’re cheap.  Especially one niche that worked really well for us was working with the dermatologists.  That’s when like a lot of dermatologists started to jump into TikTok and started creating their own accounts. And they, they’re just like dying to work with brands who are willing to work with them.


So that’s when I started working with lots of dermatologists. Like there were so much cheaper than now.  Like two years ago. So that’s when I was like able to build certain image around this skincare brand. Yes.


I think there’s like, when I, when I think about this, I’m always looking for what works, right? Growth tactics that work. And definitely one we hear a lot is like, look, if you get to the right platform early, things are much easier, right? Because they all get congested, and the price goes up, and they don’t work as well. That’s part of it.  The other part that I think maybe people don’t appreciate that I think probably you and I do is, I mean, you’re from South Korea, but your e commerce base is in Shenzhen,


Sheen, right? Mm-Hmm.


People don’t, like, appreciate how dynamic e commerce is in China in particular, and in Asia more generally. A lot of the new trends start there. So, I always tell people, like in Europe, you just study what’s going on there, and you’ll see what’s coming next, and you can get there first. You know, people knew about TikTok in China long before it hit the rest of the world. And you know, so one, you got a lot of stuff coming from there.


Two, the, you know, e commerce in particular is so  I don’t want to say cutthroat, but it’s hyper competitive,  right? Everybody, there’s a lot of people doing it, everybody is very fast on their feet. So when you say, I heard from a friend, this is where they were getting traction, like, that doesn’t surprise me at all.


Right, but,


I think these people in China, they, they just naturally understood the traffic, the importance of traffic. Cause they don’t really have any offline marketplaces as much as in the U S right in terms of like retail channels and things like that. Most of their purchases, they make through apps  and, you know, like they don’t even have credit cards.


They just went directly to using WeChat pay or Alipay  in this sense. So a lot of their logic, a lot of their lifestyles are around revolve around the online marketplace. So these people are just,  just naturally they understand better about this and then.  You know, the Douyin app, right.


Like the,  the Chinese version of TikTok, like their actual their actual holding company of TikTok, right?


So it worked so well for China. And so when I came to China to learn about the development of Douyin, I felt like I was in a time machine or something, cause like, it’s definitely going to happen in the States with the TikTok too, right? How many, you know,  Like essentially there are so many new brands or consumer brands were created with the growth of Douyin in the last four or five years in China.


And then that wave, I knew that it’s going to come with the U S TikTok as well. So there was definitely information arbitrage  that I was able to make in that space.


Okay so anyways, let’s get back. So


back to


You know, the key question is what worked? You had that initial phase of growth. Sounds like you sort of more, you know, you built out your team. It became more of a, you know, established business as opposed to, you know, a small group of people hustling like crazy. Sort of what happened next in terms of what worked and what didn’t?


sure, sure. So what worked was,  I think it was over the, it was more about the channel, you know, like where you’re capturing, you’re going in early in the, in the channel that’s growing, that’s undervalued. Right. And then we’re, we kept playing on this investment thesis where there is an arbitrage  of attention.


That we can make.  So we go into the, the new and growing platform like TikTok, and then we just get in early and we, we work with lots of influencers or you run ads when it’s cheap.  And that’s, that was like a Mac in terms of macro perspective. That’s what worked best for us.  Yes. And then obviously. We have a really good branding at this point.


So we had a lot of returning customers, right? So we were basically when we acquire new customers, we might be even losing money,  but we were okay with that. And we could, we could still just double down on investment on acquiring new customer because there’s a really good email marketing and engagement with the customer through our social media.


That  we have a really high return customer,


Yeah, this is one of the things I talk with companies a lot. You know, the acquisition game is to a large degree outside of your control. You know, Facebook changes the algorithm or whatever, you know, what are you going to do? And it’s a game we all have to play, but it’s difficult.  Retention is a game we can control.


Like, okay, we’ve got a customer, keeping them, you have a lot of ability there. You know, emails directing them to your own page, building up your own brand. You know, I like that game much better. I feel like it’s winnable. The, the, the attention game, the initial acquisition game you know, as I say, it’s, it’s a, It’s a constantly changing game that kind of sucks, but we all have to play.


Like there’s no, you can’t avoid it. We all have to play, but I love retention strategy. So that’s one of the first things I do when I talk to companies is like, what’s your attention rate on customers? Are they fading away?  You know email, direct channels data from them, things like that, engagement.


Yeah, I like the retention game much better, actually.


Because when I’ve been talking, I’ve been keeping in touch with obviously professor Towson over the years. And that’s what I learned so much about, like, importance of being able to grow what you can control. Cause like these platforms,  they essentially like  at the beginning, they’ll be really friendly to you for, so that you can like, as an advertiser, you come in and.


You can grow with them, but like later on when they become so big and they’re the ones who are controlling the price. Right. So like what you can control becomes so important in terms of just simply, you know, like a list of customers email,  like that’s so much more important. Then  let’s say like social media account, how many followers we have, like in TikTok, we have 300, 000 followers.


And IG, we have like 70, 000, but our reach, like our organic reach of posting, when we post our new videos or something on TikTok or IG in our own accounts, the reach we get  just decreases so fast over the year,  right?  But then we have a really good email list of customers, like these people we can always talk to and there’s no one in the middle, right?


So we directly talk to them and. Always can like have expect really high open rate, high revenue from these loyal customers.


I think one of the other things that matters here is, everybody’s playing, well, not everyone, a lot of companies are playing that same game. You know, acquire your customers through the platforms, try to build relationships with them through email or something that’s direct and under your control. The problem is,  most people don’t want relationships with most companies. I, I don’t want a relationship with the company that sells me socks. So,  You know, I’ve actually, I, I mean, I really like skin care and beauty care as a segment because it’s an area where people care and they want to learn more and they read what you send and there’s a lot of dimensions to the customer experience.


It’s not just like give me a pair of socks that are at a good price. It’s like,  It’s interesting. It’s enjoyable. So I think this whole strategy,  you really have to have the right product category for it to work. It’s one of the reasons I like beauty and skin care so much as an e commerce. People really do engage with the content. They want to peptide based face serum is better than another one. You know, most product categories don’t have that. So,  when I was looking at your story and thinking about it, I thought your switch into beauty care as opposed to pillows was a huge deal. Suddenly you had more dimensions to build against in terms of what customers care about. As opposed to just give me a basic product for a decent price.  You know,


like companies like Casper mattress or purple, these people, I think they, I’m not saying they’re.  Bad brands or whatever. I think they were very lucky and they played really well. And like Facebook as a channel was growing so fast. Right. And then at that point, like 10 years ago, like nobody cared about the privacy online and it was so easy for him to target customers on Facebook.


And then they essentially had cheaper prices for mattresses or, or, or pillows or whatever, and they were able to grow it. But like, look what happened to them. Because when it’s these, these. Consumer goods, like certain niches, it’s so hard to remain competitive over time. Cause it’s like, no one really wants to, as you said, like, no one really wants to make another relationship with, with a brand that just wants to constantly sell you something.




Yeah. No, I agree. I think, like, those are, I’m sort of making a list of takeaways, growth tactics. And obviously, channel selection, getting there early, doing the arbitrage, as you mentioned.  I think,  Being in an environment where you’re fast on your feet and you’re going to know things people aren’t, which kind of naturally happens to all of us based in Asia.


It’s really easy to know what’s going to happen next in Europe if you live in China, Asia, in terms of e commerce. Like, you can see it coming  a year in advance.  But, you know, then the product selection where you choose to play, that matters.  Okay, how about sort of back on topic, what other aspects, sort of, in terms of things that worked you, okay, it was up to 10 million in sales,  the company developed more into what it is today what happened next, like, in terms of what worked and what didn’t?


Sure, sure. So basically For theology, we did about $20 million in sale last year.


basically the third year.


of our business,  we did $20 million  in sale. So we grew quite fast in the last few, few years.  And then I think for us,  what really worked for us is just like in the, in the big picture framework, obviously we have a really good backend acquiring. When we acquire a customer, we can just make them our fans, right? Loyal fans. And then at the bit, but what it really matters is like how to continue to acquire customers.


So that’s the part that we, we, we spent, we spent a lot of time like building. But at that point, at one point, if you grew up to like 20 million or higher in revenue, like it’s really difficult to just stay on online channel. So we’re looking into getting into more channels, like an offline, where we can be seen more by the customers,


For retention you said you’re good at the backside. How does, back end, how does that,  why is it you’re so successful there?




For the, for the backend, right? I  think it’s, it’s really, it’s maybe it sounds boring, but it’s really all about knowing your customer base.  We know exactly  their age range and what they’re looking for.  I think that matters the most. And then we create contents that are exciting to them and entertaining to them.


Essentially, I regard ourselves,  our company as entertainment company. that generate lots of contents  than just a skincare producer.  I think there’s a clear difference between the two because  in, in, in this niche of skincare, there are so many products and so many brands popping up that it’s, it’s almost like  undiscernible between  brand A and brand B, right?


And what we think is the most important thing in that case will be how you like create contents.  How you create contents. And then these contents have to be very entertaining, engaging, and educational for customers to really see the value of like, knowing your custom, you’re knowing your brand better,  if that makes sense to you.


No, that’s, yeah. I think we’re all becoming content creators because it’s the only way to keep people’s attention. Like, or, not to keep their attention, but to get them to engage. Yeah. I mean, I create content every day, so for me, that’s all good news.


Yes. Yes. So like one big, biggest trend right now in skincare is like all these dermatologists, all these doctors, or all these estheticians with like these YouTubers who are like doctors or estheticians, these TikTokers, these people start to launch their own brands to monetize their traffic.  And it works really well for them because they have a really good brand.


They have a really good fan base. And.  Like these people, they can, like this TikTokers or YouTubers or dermatologists, they can create contents  in a, in a matter of minute. Right.  And there’s no cost involved in it. Right. For brands like us, it’s a little bit more, it’s becoming more and more, a little bit challenging because like we need to work with dermatologists, which we need to pay to create contents.


Right. So there’s definitely a trend where we’re like, we’re. We’re like kind of falling out in this macro trend where it’s so easy for each Individual human beings can create new brands in skincare because essentially Manufacturing if you can figure it out,  it’s not that hard, right?  So this this that’s that’s actually the biggest challenge for us right now and we’re we’re finding ways to Obviously cope with that


I think the game,  I mean this is kind of the point of this podcast, is the game keeps changing.  Right? And yeah, definitely professionals that are creating content and I think there’s a, the other problem is, look, the world’s just  tons  of content now. Too much.  So the standard explanation is, well, you need to personalize.


You need to personalize. I’m not sure that’s true.  But yeah, it’ll keep changing. Okay, we’re almost out of time here. Let me ask you one last question.  Given that the game keeps changing,  what is your process  as a person, you know, founder, as a company,  to keep finding new things that work?


Experimentation, just try stuff, talk to friends.


Like, what do you find helps you sort of identify something, you know, if the growth isn’t happening like it was last year, where do you find the next tactic?


sound weird, but I always try to learn from.


Like teenagers or like people in their early 20s trying to start new, new businesses nowadays, if you go to like YouTube and just  literally search like TikTok ads or  how to start an e commerce business, like these people, like are 18 years old or something very young age, they’re doing, they’re just getting started.


Doing so well in this game. And these people tend to have less resources to begin with. Right? So they always have to find new ways to reach the customers. So these people, what they’re trying to teach you, obviously, like a lot of them trying to just sell, sell you courses on YouTube, but when you like listen to them, there’s some truth in it, right?


So that’s when I, that’s why I always get inspired by these people. That’s, that’s my number one way to grow.  If you want something more like concrete, what we’re trying right now, I think obviously like TikTok  is pretty saturated, very competitive, but TikTok Live is, is the number one strategy, number one focus of the overall ByteDance company.


So they’re really trying to make TikTok Live work, right? And as you and I have seen in China, it works really great for Douyin, which is like Chinese version of TikTok. For TikTok live, TikTok live is like such a powerful tool that has become a part of life of all these Chinese people. So TikTok live is something that we’re focusing on to grow.

And we were trying to get there earlier, earlier than the rest of the crowd, basically.

Yeah, I mean, I agree. I’ve been, you know, I do a lot of talking around the world. I’ve been pointing people to that for quite some time now. I’m like, this is what’s next. Here it comes. We can see it on the ground in China already. And it’s  stunningly effective. Like Really impressive in many ways.

Okay. I think that’s 35 minutes. Yeah. No, that was, that was super helpful. I mean, I’ve been taking notes over here. So that’s great. Anyways, I appreciate your time. You know, good fortune with the, the company and, you know, let’s definitely stay in touch. It’s, it’s, it’s interesting that we started out as sort of professor and student, and now you’re teaching me, which is, that’s the way it’s supposed to happen.

It really is. You, you really do hope for your students to go beyond you, and then you’ll, it’s very satisfying. So, no, that’s great. Anyways. Anyways, appreciate it. Have a great day.


I write, speak and consult about how to win (and not lose) in digital strategy and transformation.

I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.

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