E.l.f. Cosmetics has announced it will acquire Rhode, the viral beauty brand founded by Hailey Bieber, in a $1 billion deal. This follows news that it will launch in all Sephora stores in the US, Canada and UK by the end of 2025.
Rhode’s journey is the ultimate success story in the creator economy business model of building an audience first, learning what it wants and launching a company informed by these insights. Founded in 2022, the brand retails ten accessible products to create a glossy everyday aesthetic targeted at the Gen Z TikTok audience. It has been credited with starting viral beauty trends, quickly improving based on customer critiques and above all, keeping consumers’ attention. This drove net sales of $212 million in its last fiscal year, which ended in March.
You may also like
For beauty conglomerates, Rhode’s success and E.l.f.’s acquisition may reinforce the necessity of macro talent-led, D2C businesses in the age of TikTok. Rhode is a lean operation which responds to the needs of an enormous, fast-paced consumer base. There is an appetite and daily use case for every part of the brand’s output. This communicates value, but also responds to Gen Z’s love of routine and routine content. Rhode has risen off the back of social audiences’ desire to view habitual behaviour.
@haileybieber toasty glam using no brushes fingers only 🫣 now you try! Hehe
Then, of course, there is Bieber herself. Not just the face of the brand, but the embodiment who continuously stays true to its elevated aesthetic. She drives millions of views for Rhode through her own content – which often features her products – and has an audience of 15.4 million on TikTok alone.
That’s not to say she is loved by all. As a founder, she divides the social audience which endlessly pits her against her husband’s ex-girlfriend, Selena Gomez – the founder of that other Gen Z mega brand, Rare Beauty. Mass audiences engage with content which dissects Bieber’s personal life and this drives earned media about her – and by proxy, Rhode – through the roof. This commentary can be astonishingly catty, but realistically it is also means her business has an unprecedented amount of attention 24 hours a day.
@haileybieber very cute and very flushed 🍓@rhode skin
So, what does all of this mean? In the age of TikTok, heritage brands have struggled to react natively and keep up enough to use social media effectively. They have a core audience that they can’t disrupt – because this risks losing those loyal customers – but an awareness they must attract new audiences. They need time to figure out how to make everything work in their favour.
Meanwhile, these macro talent-led brands have all the attention, micro lines of product that achieve mass volumes of sales and are on the cusp of moving into brick and mortar retail at scale. Acquiring these businesses gives heritage conglomerates time, boosts revenue and allows everyone to learn from a very modern kind of success. It goes without saying, we should expect more of these blockbuster deals in the next 12 months.
By Sara McCorquodale, CEO and founder of CORQ.
Strawberry girl summer racks up millions of views: Why Hailey Bieber is TikTok’s hottest beauty icon