The Celebration Box saga – detailed in Jade Schutte’s now-famous Facebook post, Commerce Commission complaints, and Iyia Liu’s Instagram – is about to leave the public consciousness. Two weeks is a long time to stay angry about a box of donuts. This hot media mess has proved nothing about Iyia Liu’s business practices – she acted in-line with her tried-and-tested strategy. What it does prove is that social influencer marketing has its limits.
The Strategy
Liu founded Waist Trainer at the age of 21, with $6,000 in savings. It’s an Alibaba drop-shipping business, ordering in waist trainers from China and passing them on to customers with a mark-up. Simple stuff. The year Waist Trainer was launched – 2015 – Liu spent $500,000 on Facebook marketing. It’s like they say; nothing ventured, nothing gained. Within two days of paying Kylie Jenner $300,000 to post about Waist Trainer, the company had received 2,000 orders.
Liu now sells her marketing services off the back of her e-commerce guru brand.
The next year Liu founded Luxe Fitness, and immediately poured all her money into social influencers and online marketing. The strategy worked once, and it worked again. Luxe fitness supplements and protein powders are still going strong in the #fitspo crowd.
In 2017 Liu founded Bambi Boutique, a clothing company that currently has over 200,000 Instagram followers. A couple of months ago she launched Celebration Box NZ, a gift box delivery service. A couple of weeks ago, Father’s Day nearly brought it all crashing down.
Talking to the NZ Herald in July, Liu explained her new company was set up along similar lines to her previous ones. “People are so lazy these days we thought it would make the whole gifting process easier,” she commented. The gifting process was easy – influencers up and down the country were soon receiving Celebration Boxes. In less than a month, the company had sent out around two thousand orders.
Liu said that she was adding more boxes to the range, and appealing to more consumers. “It’s e-commerce,” she said. “It’s using social media marketing and because the product looks pretty people are sharing it, so it is getting a lot of organic reach.”
Liu’s business strategy is to spend the majority of her money on marketing instead of inventory or web set-up. In particular, she’s a fan of using influencers to spike brand awareness. Talking to Idealog last year, she said, “I think at the beginning when you’re launching you do have to put a lot into it, because no one really knows the brand. Once you get the brand up, you can pull back a lot on that influencer marketing and focus more on other types of advertising.”
However, pulling back on influencer marketing is a job for someone else; she sold both Waist Trainer and Luxe Fitness at their social media peak. These two businesses were simple drop-shipping tasks, easily passed on.
Speaking to The Spinoff earlier this year, she reiterated her love of social influencers: “The reason I like using third-party content creators is they’re essentially creating content for you,” she said. Influencers Liu has worked with include Riley Hemson (@healthychick101), Shannon Harris (@shaaanxo), and Simone Anderson (@simone_anderson) – alongside, of course, Kylie Jenner.
This is the strategy that made Waist Trainer and Luxe Fitness so successful. Influencers posted about the products, and sales shot up. To scale up those businesses, all she had to do was order in more product from her suppliers. To scale up Celebration Box is a totally new challenge.
What Went Wrong?
In a 2016 interview with NZ Business, Liu put the success of Waist Trainer down to her focus on customer service: “Every single day I say we have to ship out all of the products on time and respond to customer emails as fast as possible. I think as long as you get the customer service side as good as possible, everything else is going to be fine.”
Her prophesy came true. She got the customer service wrong, and her business is now burning with the ire of a thousand spurned daughters whose fathers never received their bald donut rattling around in a box of K Bars.
Celebration Box delivers donuts and assorted lollies around New Zealand. The boxes range in price from $39.00-$130, with optional add-ons like jars of Nutella, tampons, or glass bottles of Coca-Cola. Note these are all items that, on a three-day courier to the South Island, will inevitably mangle a donut into a stale, crusted pancake.
They look stunning in the photos, though, and the company has nearly 70,000 followers after only two months and significant PR damage.
Fans of these influencers went ahead and ordered the product, only to find that the boxed arrangement designed for a YouTube celebrity is very different from your average Becky’s delivery.
Co-owner and baker at Celebration Box Briar Howard told 1 NEWS she acknowledged not all customers had “the experience they were expecting”. Father’s Day was the beginning of the storm for the business, which was unable to cope with the 35 percent increase in orders, nor deliver them intact. Orders within Central Auckland were OK, but like all Liu’s other businesses Celebration Box was nationwide.
“Father’s Day was a big learning experience for us,” stated Howard. “We worked extremely hard and quickly hired staff to ensure we could meet the demand.” They did not meet the demand, and the team at Celebration Box has confirmed that they deleted negative feedback about it on their Facebook page.
In Defence of Iyia Liu
After Schutte directed the 14,000 viewers of her post to the Commerce Commission, Liu and her team had to speak out. She apologised on social media, commenting that scaling a business up so quickly was a difficult process.
Critics have attacked her for this post, which is awkwardly geo-tagged in Bali. Many feel that having previously created several successful, rapidly-scaled companies Liu shouldn’t have had a problem. These criticisms don’t acknowledge just how different Celebration Box is.
“In the past, the products I have sold were manufactured so they all maintained the same quality no matter the situation,” she explained to us. “It was easy to scale.” The contents of a celebration box are fresh, locally-made, and easily damaged. This makes them difficult to produce and deliver. “Each product is handmade and it’s also perishable,” she told us. “That in itself has been a new experience and challenge.”
Why start a business so far removed from her previous products? What was she thinking? Despite constantly posting from Bali, Liu is something of a thrill-seeker. Over the years, she has repeatedly mentioned in interviews that she’s started a business because it feels good to her – not off the back of any nitty-gritty business plan.
Celebration Box is a completely new beast for Liu, and it’s teething worse than a baby with an extra row of chompers. But don’t doubt that Liu is jotting down every pitfall – if she can’t rehabilitate the image of Celebration Box, she’ll apply the lessons to her next business. She stated in response to the negative press that “we can only learn from our mistakes and continue to improve every day.”
Celebration Box has only just hit two-months-old, and it’s on track to make $2 million dollars this year. Iyia’s first business, I’ll Take Three, was a failure. It was a clothing company. Her next clothing store, Bambi Boutique, was very successful. If history repeats, a screw-up like Celebration Box could lead to Liu’s domination of gift-delivery market in the future.
Bambi Boutique had a $15,000 launch party – impressive for a previously non-existent brand.
Is Redemption Nigh?
Liu’s November Girls in Business event is co-hosted by Suzy Cato and Erin Simpson, two childhood icons known for their catchy tunes and good business practices. Liu’s credibility has taken a hit, but this event may well restore it. She’s co-hosted Girls in Business with others, but sharing a stage with two long-established personal brands that inspire trust and confidence is great PR.
We asked Simpson, perhaps best-known for having the bangingest TV theme song of all time, about her experience working with Liu. A down-to-earth TV presenter and interior decorator is surely a good judge of character.
“Iyia is nothing but a pleasure to do business with,” she commented. “She has done nothing except be open and honest. I have been very privileged to live in a country that has supported my business ideas, so in return I will always support start-ups.” Simpson, the woman who once described her own TV show as a source of inspiration, clearly has a strong sense of principle.
If Liu holds fast to her “learn from our mistakes” policy, Girls in Business could be a platform to heal Celebration Box: a PowerPoint dissection of what went wrong – and when production should, perhaps, be priority on par with marketing – could be valuable to attendees. It could also be the grovelling, non-Bali-based justice consumers want.
When to Use Celebration Box
The website’s FAQs contain plenty of warnings, including “If you are in the South Island please order at your own risk.” They warn that full refunds are hard to get, and that due to popularity they can’t guarantee the time nor date of deliveries. Potential customers should read these.
We tested the service ourselves, and ordered a Classic Box. The order was placed on a Friday morning, for delivery on the following Monday. It arrived at our office by 11am – just in time for an early lunch. We found the donuts to be unsmashed – a win!
The donuts weren’t terrible and the lollies were fine, but there were fewer than Instagram had led us to believe. It wasn’t a bad box at all – it was just average. If we’d received it damaged or late, we’d have been mad, too.
@bellabbrook’s box compared to Georgia’s
$At 85 dollars for six donuts and a jar of Nutella one must assume that the box itself is seriously good quality. In fact, for that money, they could design a box that holds donuts still instead of grinding them against tampons and breakfast spreads. The box contains a magnetic strip that keeps it closed, and the donuts out of the air. This seemed the most valuable part of the delivery.
If the box had been as packed like those on Instagram, or if the donuts had been mind-blowingly good, we doubt the company would have received so many complaints about late or damaged products.
Our conclusion: for an enjoyable experience with Celebration Box, we suggest you either become a social media influencer or order from within Central Auckland.
Other gift box delivery services, like Wellington’s Glazed and Auckland’s Sweet Box, don’t fly so close to the sun. They deliver within their area, unwilling to risk smashing their lovingly-baked goods to pieces just for the clout. They also provide alcohol.
We end with a piece of advice Erin Simpson gave us, which we feel applies not just to start-ups and Iyia Liu, but also to consumers:
“Where there is no struggle, there is no strength.”
