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Zago Milano Debuts in Makeup, Maps Out Next Steps for Growth

Following a round of investment in 2020, the Italian indie beauty label is planning to boost its international expansion, including a direct-to-consumer U.S. platform by the end of the year.

MILAN — Caterina Bartolozzi embodies the Zago Milano woman: cool, practical and boasting a fresh, natural complexion.

The creative director of the Italian indie beauty label was all smiles while introducing the latest project she developed with her friend and local influencer Desiree Maldera: a makeup capsule collection that marks a first for the brand.

Established in 2017 by Gianluca Ottolina and Andrea Zorloni, Zago Milano carved a niche by offering accessible and vegan-friendly under-makeup products, in addition to skin care.

“Launching makeup means adding the final, little piece to the puzzle,” said Bartolozzi, underscoring that the project also aims to mark a “return to normality, to taking care of oneself and use lipsticks again.”

According to Ottolina, tiptoeing into color cosmetics was a bet “considering the historic moment and how the category was deeply affected by it.” Yet the chief executive officer of the company believes the move will further boost brand awareness, also fueled by a democratic price positioning.

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Retailing at 38 euros, each “Meet me” kit is comprised of a lipstick, lip pencil and a makeup remover balm. The capsule offers three nude shades, each marketed on the packaging according to three different moments of the day — breakfast, golden hour and night.

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“The neutral colors are in sync with what Zago stands for,” noted Bartolozzi, pointing to the brand’s mission to enhance the wearer’s own natural beauty. Consumers could place a preorder on starting from Thursday, while next week the range will be available on the online store of Italy’s perfumery chain Pinalli.

Zago Milano's makeup capsule collection.
Zago Milano’s makeup capsule collection. Courtesy of Zago Milano

Although Ottolina acknowledged that the project offered “a nice opportunity to access a segment we never explored but that we could draw nearer and think of integrating in the future,” the executive highlighted that the main focus of the company will remain on under-makeup and to further build expertise in that category.

In September, Zago Milano underwent significant changes, following a round of investment that raised over one million euros at the beginning of 2020 and included the Angel Capital Management private investment firm founded by Angelo Moratti, MIP anchor investor and vice president of Italian oil refinery company Saras SpA.

According to Ottolina, the pool of investors was attracted not only by the concept of the brand but also by its know-how and in-house team. The company boasts a short supply chain as each stage of product development — from the creation of formulas and manufacturing to packaging and logistics — is based in the Lombardy region to keep quality control and sustainable standards up, as well as time-to-market and costs competitive.

“After the investment, we reconsidered our positioning and price points, we committed on heavily enhancing our brand awareness and, overall, I would say we have been less messy,” admitted Ottolina. For instance, the company rationalized its product assortment, shifting from 70 stockkeeping units to 20 SKUs.

The Zago Milano offering is defined by multifunctional products priced from 14 euros to 38 euros and aimed at enhancing the skin care routine or improving the performance of makeup looks. Best sellers include the Bella Pronta priming moisturizer, the Il Mio Glow illuminating face cream and the Molto Fresh primer stick.

The brand attracts a core target of women ages 24 to 31, with an extended reach encompassing consumers aged 18 to 37. The CEO said there are no plans at the moment to further expand the demographic reach — opening also to a more adult target, for instance — as that would require a shift in the communication and image of the brand.

These two aspects were additionally tweaked during the past year, when the company revisited its packaging with popping colors and added the claim “Made in Italy con amore” — or “Made in Italy with love,” in English — which Ottolina said helped consumers to better identify the label as a standard bearer of the Italian beauty routine.

The changes specifically boosted the business in the U.S., where the brand has a partnership with the subscription box service FabFitFun.

“We have a foot in the American market, which [is not to be taken for granted] for an Italian startup. Our competitors here are all focused on the domestic market,” noted Ottolina, who revealed that by the end of 2021 Zago Milano will launch its own direct-to-consumer platform in the U.S.

At the moment, sales generated Stateside account for 30 percent of total revenues, which were 800,000 euros last year.

“We lost three months of business in 2020 not only because of the pandemic…we wanted to consciously reset and regroup for the launch in September, which repaid our efforts,” said Ottolina. He candidly said that overall, the pandemic didn’t impact the operations of beauty manufacturers in the country but it significantly affected logistics and “the behavior of consumers, as their concerns drugged the market: There was a spike in sales in March 2020 and then complete flatness the following month. It was like a bipolar market.

“But customers change every day,” continued the executive, also acknowledging how consumer awareness and attention to ingredients included in beauty formulations keeps growing. “Their knowledge is changing and I expect their interest on discovering other types of active ingredients will be one of the drivers in the future,” said Ottolina. Incidentally, Zago Milano launched a separate blog to engage with its community on these topics and further create awareness around the concept of under-makeup.

Ottolina forecast the company will register from two to three million euros in sales this year, depending on the performance in the U.S.

Caterina Bartolozzi and Gianluca Ottolina.
Caterina Bartolozzi and Gianluca Ottolina. Sofia Brogi/Courtesy of Zago Milano

At the moment, Italy alone accounts for the remaining 70 percent of total revenues. In terms of domestic distribution, Zago Milano is expanding its presence at Rinascente’s outposts, in addition to being available at its own online store and at Pinalli. Ottolina praised the local perfumery chain — which has 60 stores here, in addition to e-commerce — for being a “great hub for Italian indie brands,” mentioning other trending names in the market distributed by Pinalli, such as Nabla Cosmetics and Mulac Cosmetics.

But a significant international rollout is on the company’s agenda. In addition to its own e-commerce in the U.S., toward the end of the year Zago Milano is expected to launch in the Middle East in partnership with a local “strong retailer,” teased Ottolina.

The company is also in early negotiations with a distributor to expand in Europe — a move slated to take place next year. In the second half of 2022, it will debut in China, starting with a launch on Tmall.

These moves will contribute to the growth of the company, whose goal is to reach sales of 25 million euros by the end of 2023, said the CEO.

“Next year will be pivotal. The international vocation is essential for us.…If you think about it, there are no major Italian independent beauty brands abroad: We Italians manufacture for everybody but the French are the ones cashing in,” said Ottolina.

“A con of our country is that it believes too little in startups,” he continued, underscoring that local indie labels can’t compete with their American counterparts, which are often backed by big budgets and investments.

“Also investors should believe a little bit more in this industry. [There are investments in] third-party manufacturers, but even the last part of the supply chain can create value,” he concluded.