Over $300,000 in investments. How the ISEI cosmetics chain operates in Poland and Cyprus.

"Our exclusivity and uniqueness have disappeared," says Anoush Tovmasyan, owner of the ISEI brand, "We have a new challenge: what will be our unique selling point?"

At the end of 2024, she opened two stores of her ISEI chain abroad: in the capital of Poland and in Larnaca, Cyprus. Investments in both stores and the online store amounted to approximately $300,000.

Anoush Tovmasyan bet on the fact that there was little Korean cosmetics in Polish and Cypriot stores. However, by the time the store was launched in Warsaw, many Korean beauty products had appeared in Polish chain drugstores. Both on the shelves and in the form of branded corners.

What is the businesswoman doing to overcome this challenge? Read the article LIGA.net

What is the ISEI network?

ISEI Korean cosmetics stores have been operating in Ukraine since 2015. Currently, the network has 50 stores in Ukraine. The company operates on a franchise model.

In 2024, the revenue of the "parent" legal entity of the franchisor, TD Magnus Trade, amounted to 164.5 million UAH, and in 2023 – 146.2 million UAH, according to YouControl data.

Magnus Trade imports cosmetics from Korea. The company's specialty is selecting trendy products that will be popular with global fashion bloggers. They determine this in various ways, for example, by watching videos on TikTok or blogs on YouTube.

The average number of product items in the assortment of each is up to 2000 SKUs.

How we researched the market and chose countries for expansion.

Anoush Tovmasyan opened the first foreign ISEI store in Poland in November 2024. The country was chosen not randomly, but based on research results.

In 2023, ISEI launched test online stores in 15 European countries, including France, Italy, Spain, Great Britain, Poland, Sweden, and others. As well as in the United Arab Emirates.

We tested four metrics: reactions to promotions, to the product, to the cart price, and to checkout.final stage of the purchase process, ed.In addition, we looked at the number of items the buyer adds to the cart, the cost of the customer's search, etc.

The testing lasted, on average, three months. About 70,000 UAH were spent on targeted advertising for each country. (In Germany, Italy, the Arab Emirates, etc., the budgets were larger and the process longer).

However, they didn't manage to make any money: in reality, the store wasn't selling any goods.

As a result, Poland and Cyprus were chosen.

One of the advantages of Poland is its logistics, as InPost delivers goods throughout the EU.

"We thought, if we launch an online store in Germany, the Netherlands, or Austria, we can deliver goods there from Poland," explains the entrepreneur.

The fact that Polish women are familiar with Korean cosmetics, don't skimp on skincare products, and have high purchasing power also played a role. The Ukrainian factor is also important. Nearly 1.5 million Ukrainians legally reside in the country, according to the Polish Office for Foreigners.

Opening a store and the specifics of the market.

Anush Tovmasyan invested $200,000 in opening a 70 sq. m store in Poland. About $130,000 went to the offline point, the rest – to launching an online store and inventory.

The ISEI store was opened in a shopping center in a residential area of Warsaw. Renting space in a shopping center closer to the center is not easy. There is almost zero vacancy there, and an unfamiliar brand is not particularly interesting to the management company.

The revenue of the Warsaw location is growing by 30% every month. Anush Tovmasyan does not disclose the exact figure.

The entrepreneur plans to recoup her investment in the store in Poland within three years. Currently, she says, a pessimistic-realistic scenario is playing out; the calculations were more optimistic, she admits. The company is operating within the projected range, but at its lower limit, the entrepreneur says.

Increased competition took its toll. When entering the Polish market, the company expected to find a limited selection of Korean cosmetics in stores. However, soon after the opening of ISEI in Warsaw, many Korean products appeared in retail chains. Anoush Tovmasyan's business proposition ceased to be unique.

A new feature of the store in Poland is expertise in cosmetics selection. And also Ukrainian service and speed in responding to trends.

"Our key feature is how we advise and help to choose cosmetics. How quickly we respond to trends that exist in the market and among our customers," says the entrepreneur.

Cyprus Perspectives: Higher Check and Less Competition

The situation is different in Cyprus. The first ISEI store here also opened in December 2024. Anoush Tovmasyan invested about $130,000 in the retail space in the "Metropolis" shopping center in Larnaca.

The planned payback period for the Cypriot project is two to two and a half years, she says. According to the entrepreneur, there is little competition and high demand in Cyprus due to tourists. Anush Tovmasyan expects that it will be easier to achieve stable profitability in Larnaca than in Warsaw. However, there is nowhere to scale up in Cyprus: the country is small.

The markets where the chain operates are different, says the entrepreneur. Ukrainian customers have the largest number of items in their shopping baskets. Women here are accustomed to multi-step facial skincare routines. Therefore, sales of entire cosmetic lines are not uncommon in Ukrainian ISEI stores.

It's different in Poland: if a customer comes for one cream, it's difficult to explain why she needs an additional product, says the entrepreneur. But in terms of revenue, the Warsaw store is close to Ukrainian ones due to higher prices in Poland.

The best results are in Cyprus. Here, customers are more willing to buy more expensive and larger quantities of cosmetics.

Scaling through franchising

Anush Tovmasyan plans to scale the business in Europe in the same way as in Ukraine: through the sale of franchises. Therefore, the current stores are test sites for developing the model.

"Our task is to understand profitability, costs, and margins. What should the model be like so that both the franchisee and we earn money," explains the owner.

The long-term goal also includes launching a private cosmetic brand with sales through the established network of stores.