The private venture of Grammy boss Paiboon Damrongchaitham plans to grab a 10 per cent share of the one billion baht (US$23 million) market in its first year.
The market offensive will impact Better Way, owner of market leader Mistine, which controls a 52 per cent marketshare.
In a defensive move, Better Way has tied up with Thailand's second largest entertainment firm RS Promotion in a Mistine Thank-You concert campaign, initially worth 12 million baht.
The companies are fighting for chunks of a market growing at an enviable 10 to 15 per cent a year, for which each must recruit members - or freelance sales agents. U Star's vice-president for marketing, Chalermphan Srichanachaichok reckons that each member is worth between 10 and 14 loyal customers.
U-Star hopes to recruit 100,000 members by year-end. "In just two weeks, we have recruited 10,000 members, and sales have been more than one million baht a day," she said.
The main battle will be in the concert arena: Better Way is banking that free concerts in nine provinces featuring RS's artists will keep its "Mistine Ladies" motivated; U-Star is undertaking a broader road show by virtue of its newcomer status, covering all 76 provinces, and coordinating recruitment drives to coincide with concerts of Grammy's hottest property, Thongchai "Byrd" McIntyre.
The company has simultaneously launched a 100 million baht media campaign with a television ad featuring Byrd and the tagline 'U Star, Cosmetics for Superstars'.
"The key to succeeding is good management and resources," said Chalermphan.
"One of our resources is Grammy's artists." Cataleeya McIntosh and Nat Myria will join Byrd to battle top RS Promotion names including Matthew Deane and Earn Techaruvijit for the first time in direct-sales cosmetic history. While concert marketing has been fodder for a variety of consumer products including soft drinks and snacks, this is the first time it is being used in this industry.
Industry watchers are not surprised by Mistine's prompt and aggressive response to the newcomer - they point out that U-Star is the first serious entrant to the market since disgruntled Avon employees formed Mistine 15 years ago, relegating the US brand to challenger status, with a 24 per cent marketshare.
The company recently appointed MindShare as its media buyer, and is in the final stages of a creative agency review. Ads for the launch campaign were produced in-house by Grammy.
U Star, which comes in four product lines - cosmetics, fragrances, skincare and personal care - is targeted at 18 and 25 years old, earning above 10,000 baht a month. Some 60 per cent of sales are expected to come from outside the big cities.