Here comes (create-your-own-palette) Inglot

Inglot store in Glorietta

A Polish firm that’s making waves globally for high-quality cosmetics in create-your-own palettes has come to town.

Banking on the country’s increasing consumer affluence due to the improving economy that in turn is creating brisk demand for beauty products, Inglot has set up its first shop in the Philippines in Glorietta 5.

This entry into Southeast Asia’s fastest-growing economy is part of Inglot’s aspiration to establish a broad global footprint, one boutique at a time, that is. It will likely end this year with 500 shops in 50 countries in six continents. Apart from the Philippines, Inglot is breaking into new markets like Morrocco, Peru, Yemen and Chile this year.

“I strongly believe the Philippine economy will grow very nicely,” Zbigniew Inglot, the company’s board chair, tells BusinessFriday. Inglot, during his recent visit to the country to sign a franchising deal, was surprised by the country’s “extremely very modern” shopping malls and office towers, especially in the Makati central business district where Inglot built its flagship store.

To date, this Polish firm has made its mark in international cosmetics retailing alongside its value-for-money proposition. In New York, Inglot supplies cosmetics used by the cast of the Lion King production in Broadway as well as Bloomberg TV, among others. Its products are carried by Macy’s and it now has around 20 locations in the US, including a high-profile shop in Times Square and a premium 500-square-meter studio on the fifth floor of the vibrant Chelsea Market Building in downtown New York. Inglot proudly notes that this Chelsea studio is a “special” hangout for movie stars, directors and make-up artists.

Inglot says this company uses only the “highest possible quality” of raw materials. “We pay special attention to make sure our products are healthy, free from harmful chemicals which are used by cheap producers. Quality is extremely important for us,” he says. Yet in terms of pricing, he says Inglot’s products are priced 20-30 percent lower than the comparable big names. It’s best to “ask the ladies” to attest to the quality of Inglot products, he says.

One key innovation that has recently thrust Inglot into the limelight is its introduction of a new line of “breathable” nail polish. The enamel, called O2M—for oxygen and moisture—uses the same material found in contact lenses and thus allows air and water to pass through, thereby keeping nails in better condition. Traditional enamels make nails brittle when covering them for a long time.

Meanwhile, the company has likewise created ripples with its “freedom system”—which some peers are trying to replicate as well. Such “freedom system” allows customers—whether individual users or professional make-up artists—to experiment with countless shades and color combinations of different face products, giving them the opportunity to create their own customized color palette.

“What it means is not all products are the same,” Inglot says, adding that the user can select the most suitable colors, thereby personalizing each palette. “We have the largest number of colors in our collection. We are able to create new ones very fast. Our vertical organization is not complicated.”

Made in Przemysl

The company was founded by Polish chemist Wojciech Inglot, Zbigniew’s brother, at the twilight of communist rule in Poland. Their father was an economist who worked for banks while their mother was a history teacher.

Wojciech, described by his sibling as a “risk-taker,” was the first big entrepreneur in the family. He started a chemical manufacturing company in 1983 when the state got rid of idle assets.

“He was a very unusual person. He’s a visionary,” Inglot says, saying his brother decided to buy a big area with old buildings and set up the factory against the advice of many.

Inglot chairman of the board Zbigniew Inglot

Inglot says he himself would not have made those decisions at that time. “Today, they see it as a fantastic move,” Inglot says.

Wojciech, who initially produced cleaners for cassette tape players and stick deodorants, turned to cosmetics as soon as Poland shifted to a free-market economy three decades ago. He got the idea of producing beauty products after visiting the US, where he saw a wide array of cosmetic products which was unimaginable in communist Poland.

“For my brother, it was easy. Chemical people like to mix different things, produce crazy material. My brother selected this way to produce things which were not available in Poland 30 years ago, during Russian control,” Inglot says.

Inglot products were initially distributed through supermarkets and stores but the company eventually made the big decision to set up its own boutiques to better push its products as more foreign brands flooded the Polish market. As competition got tough, Inglot allowed clients to try the products in their stores. The freedom system, which the founder Wojciech himself conceptualized, likewise received warm response not just in Poland but in overseas markets.

International expansion started for Inglot seven years ago in Canada, where subsidiary companies were opened. Inglot afterwards entered Ukraine, Lithuania, the US, UK and Australia. “Maybe three or four years ago, we realized it’s very complicated and time-consuming for us to be able to control locally those companies,” Inglot says. The company thus shifted to an overseas expansion model hinged on the franchising system.

These days, Inglot has gained a formidable foothold in oil-rich Middle East, setting up shops in Saudi Arabia, Dubai, Qatar and Abu Dhabi. It has also expanded to Asia four years ago, first in India which is now its biggest market with 12-13 stores. In Southeast Asia, its biggest market now is Malaysia, where it has seven to eight stores.

And up to these days when outsourcing has become the norm for globalizing companies, all Inglot products sold around the world, along with the palettes and the store furnitures, are all produced in the eastern Polish city of Przemysl. “We make calculations and find it much cheaper to keep it there than in China,” Inglot says.

Out of its production hub in Poland, Inglot says this company can produce as much as it needs to at a fast pace.

Family business

Inglot founder Wojciech passed away last February at age 57 due to internal hemorrhaging, but not before giving Poland an internationally successful homegrown brand. These days, Inglot and another sibling have continued to run the business. Their sister Elzbieta Inglot-Kobylanski is responsible for day-to-day operations, including control of the factory and the chemical side of the business.

A nuclear physicist, Inglot says he joined his brother’s business quite late—only at the beginning of this century. As the chair of the board, he performs representation for the company. From the onset, he joined the unit tasked to pursue international expansion and is very comfortable handling this side of the business.

“I always travel for business. It’s very easy for me to discuss with partners and 99 percent of my visits with (foreign) countries gave us new stores,” he says.

Being a family-owned business run by first-generation Inglots, the company is very flexible with its franchising system.

“We have very friendly policies. We never press our partners to open more and more (at) a very fast pace. We are a family company so no need (for rapid international acceleration),” Inglot says.

Unlike some big global brands that tend to squeeze out franchisees, Inglot does not impose any royalty or entry fee. “We instead ask our partner to spend for local advertising because they know (the local market) better,” Inglot says. Otherwise, he says Inglot is still too small to hire the likes of Beyonce, who would have cost $5 million in endorsement fees while putting up all the posters would cost another $5 million.

What Inglot is particular with, however, is for a partner in each market to put up a flagship store carrying the full collection for the eyes, lips, nails and face make-up. The partner buys all the cosmetics, packaging and store furniture from Poland. The franchise agreement is renewable every 10 years.

Here in the Philippines, Inglot entered the market in partnership with people who empathize with its target market—sisters Michelle Lim-Gankee, Hazel Lim-Lee Hok and Pauline Lim of the Sterling group (notebooks) and their friend Stephanie Borbe. These four women care about their looks (and can each be Inglot’s brand ambassador), all firmly believe in this Polish brand and have come from entrepreneurial families with retailing expertise. They formed a company called Laverne Luxe Group Corp. and committed to open at least one new Inglot store in the country every year.

“We’re totally convinced that we selected the right partners,” Inglot says.

Asked why these women entrepreneurs think Inglot will be a big hit in the   Philippines, Luxe Group president Hazel Lim-Lee Hok says: “Inglot represents one of the most valuable things Filipinos treasure—freedom. Inglot offers endless possibilities by allowing each Filipina to choose and create her own colors from over 400 shades. A variety of products can also be combined all in one palette.” She adds: “Moreover, premium quality is on top of Inglot’s list while still being reasonably priced, meaning value for money which every modern/practical Filipina will love.”