Olaplex's Rise and Crash on Social Media

There was no doubt Olaplex rose quickly in the social media world, but its fall was even more swift, if social media standards can be used as a measurement.

‍

It was founded in 2014, and has since become a popular hair-care provider with salon treatments whose bond-building technology addressed common hair problems, such as split ends, breakage, frizz, color damage, and brittle hair. Having achieved an international reputation as a brand byhairstylist and beauty influencer, Olaplex has also launched a consumer product line as well as a splashy Wall Street debut. 

‍

Olaplex is facing declining sales and falling stock prices amid mounting competition, which is making it even more vulnerable. Olaplex's products are accused of causing hair loss and damage to women in February, and as a result, dozens of women have sued the company. A once-promotional platform has become a liability for the brand due to a number of unhappy customers who have taken their complaints to social media.

‍

In a statement issued by Olaplex's Chief Executive JuE Wong, the company declared 2023 as being a “reset year.” A multi-year marketing campaign involving billboard advertising, boots on the ground at Sephora and Ulta Beauty, as well as rapid-response social media is among the tools that have nearly doubled the brand's marketing budget. According to Ms. Wong, the company desires to correct misinformation more vocally and faster. 

‍

In their genesis phase, Dean and Darcy Christal, a husband-and-wife team, narrowed down a problem they were hoping to tackle: chemically damaged hair. Mr. Christal and his team were about to give up on their approach when they came across Craig Hawker, an experienced chemist who believed he might be able to provide a solution to preventing and treating chemically altered hair. It was only a matter of time before Mr. Hawker and Mr. Pressly were joined together, and together with Eric Pressly, Mr. Hawker and he were able to develop Olaplex as a result of their work.

‍

Its flagship brand is a salon-only product that is designed to help clients bond and build stronger bonds with their stylists and was launched in Santa Barbara, Calif. Mr. Christal said that the brand was initially easy to promote, since stylists were quick to claim the serums are highly effective.

‍

After the company initially ignored comments about hair breakage and scalp problems, it did not take long before the company had publicly addressed the claims. According to Mr. Christal, it took the allegations seriously. “If any problems had existed we would have been interested in knowing about them”, he said.

‍

The product, on the other hand, was endorsed by several well-known stylists and gained praise from celebrities like Kim Kardashian, Drew Barrymore, and others for its ability to solve damaged hair. As of 2018, Olaplex began selling online, positioning itself as a one-size-fits-all solution for damaged hair. It started selling at Sephora in 2022, followed by Ulta Beauty in 2023.

‍

Following the sale of Olaplex to Advent International in November, Mr. Christal resigned as Olaplex's CEO, and Ms. Wong was brought in to replace him. With the closing of the deal in January, Ms. Wong became Olaplex's new CEO.

‍

As Amy Chang, a Los Angeles beauty influencer with more than 1.6 million followers on TikTok, said, "There was a lot of hype and fever around it." She found the products disappointing when she tried them for herself. As the time progressed, and she kept using them, she felt her hair was becoming drier, brittle, and stiffer and dryer. 

‍

The brand continued to gain popularity on social media in January 2021, and as the viewers began to ask her for her thoughts on the products, she was asked to give a response. During a Twitter conversation with her followers, Ms. Chang shared the fun fact that, “Everyone seems to love Olaplex. In fact, I didn’t.” Then, she was hired by Bumble and Bumble to promote the company’s bond-building competitor for a flat fee.

‍

It is estimated that Olaplex will be worth $15 billion as a result of its public stock offering in September 2021, which raised $1.55 billion. The hashtag #OlaplexBun, referring to an effective hairstyle that helps its deep-conditioning product set in, garnered millions of views as the brand maintained dominance of hair-care posts on TikTok. As of May 2022, Olaplex reported a 57% increase in net sales for the first three months of the year to $182.6 million, compared to a 57% increase in the same period last year. 

‍

As a result of the European Union ban on the chemical lilial earlier that year, Olaplex removed that ingredient from its products in order to gain more favorable coverage for the company. As a result of the move, Olaplex was subjected to a new cycle of unflattering news coverage. People started posting concerns about the possibility of the products causing infertility. They highlighted animal studies that involved the ingredient. There were further allegations of hair loss and damage being made. 

‍

Taking to social media channels to refute the allegations, Ms. Wong posted in February that Olaplex was sharing results from independent third-party laboratories as proof that its products were safe for use, and the brand was sharing results from independent third-party laboratories that verified the claims.

‍

In the opinion of Ms. Wong, any damage or breakage caused by our products does not result in hair loss, hair damage or hair loss.

‍

Before the company releases products on the market, Ms. Wong mentions that the company conducts a skin allergy test called HRIPT which is a standard industry protocol for detecting potential allergies or irritations. As the company mentioned, its manufacturers test every batch of products in order to ensure they are all made exactly according to the formula.

‍

There were approximately 100 lawsuits filed against Olaplex this year after the company falsely advertised its products as safe and effective and most of those lawsuits resulted in hair loss and scalp injuries. They argue that the company falsely advertised its products as safe and effective.

‍

She says, as lead counsel for the plaintiffs and as a former counsel to the plaintiffs in a mass tort lawsuit against hair-care brand Wen, Amy Davis, a Dallas-based lawyer, said that to participate in the lawsuit, she and her co-counsel are ruling out other common causes of hair loss that plaintiffs are likely to experience, such as illnesses, medications, life changes, stress, etc.  

‍

There is no doubt that Olaplex is sympathetic to people who have suffered from hair loss and breakage, but she insists that it isn't the product's fault. Her suggestion would be to consult a dermatologist regarding the matter.

‍

Several TikTok videos with the hashtags #OlaplexHairLoss and #OlaplexRuinedMyHair have gained a lot of attention due to the backlash. These videos have been viewed more than 500,000 times. A private Facebook group titled "Olaplex Hair Loss/Hair Damage?" created in July 2022 also has over 8,500 members in addition to public posts. 

‍

Approximately 80% lower than its listing price of $21 per share on Sept. 30, the shares of this brand have fallen to about $4 a share. According to Olaplex's earnings call from February 28th, net sales had dropped 21.5% in the fourth quarter compared to the same period a year earlier in 2022, and Olaplex predicted that 2023 would also be a slow time for the company.

‍

A growing number of brands are competing against Olaplex, including K18, which has gained celebrity fans like Selena Gomez and Hailey Bieber. SalonCentric, a L'Oréal-owned distributor that sells non-L'Oréal brands, recently started selling Olaplex, as well. Mr. Pressly, the other chemist involved in the Olaplex formula, has just launched his own brand, Epres, which is marketed as an alternative to Olaplex. 

‍

The company plans to take a front-line approach to combat negative sentiments on social media. Olaplex has made a commitment to marketing this year, doubling the amount it assigned last year. Ms Wong explains the company wants to give a deeper understanding of how its products work.

‍

There was no way we would have been able to intercept the misinformation, but perhaps somebody outside the organization did spread it, but we were not at our best to stop it.

‍

In order to educate both shoppers and retail associates at 180 Sephora stores and 220 Ulta Beauty locations, Olaplex has hired a field team to work there. Their task will be to report back to Olaplex after each visit. In addition to sharing user-generated social media posts on the company platforms, the company announced that it would also share some of the user-generated posts on its social media channels.

‍

It is important to emphasize, however, that Olaplex has hired more personnel in order to visit beauty supply stores weekly as well as recruit salons in markets like New York, Texas, and Los Angeles, which account for almost 43% of Olaplex's sales.

‍

It is important for Sephora and Ulta to have in-person representatives at Sephora and Ulta, according to Korinne Wolfmeyer, a senior research analyst at Piper Sandler who covers Olaplex for the firm. She notes that the brand has been expanding its products in the last few years, causing confusion, as she noted. She said that while social media can be useful to send out messages, it would be very helpful to have that human connection in person.

‍

Olaplex faces the type of backlash it does from its customers, according to Ms. Wolfmeyer, which is unusual among beauty and hair care companies.

‍

Ms. Wong expressed some excitement over the new product launch from Olaplex. Olaplex is also looking beyond its hair care offerings, commencing with the Lashbond Building Serum for eyelashes. In a clinical trial, the serum was found to have increased the thickness of the eyelashes and made them appear longer.