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EXCLUSIVE: Good Glamm to foray into live commerce in Jan; eyes acquisitions in men’s grooming, haircare segments

EXCLUSIVE: Good Glamm to foray into live commerce in Jan; eyes acquisitions in men’s grooming, haircare segments

In an exclusive conversation with BT, Darpan Sanghvi, CEO, Good Glamm Group, talks about the company's strategies, future acquisition plans, and many more.

Content-to commerce unicorn Good Glamm Group, after a string of high-profile acquisitions in 2021, is expected to launch its live-commerce app by mid-January, 2022. Good Glamm Group's CEO Darpan Sanghvi told Business Today in an exclusive interaction that the company will partner with e-commerce majors like Myntra, Amazon, Flipkart for its live-commerce business. Good Glamm Group is also eyeing acquisitions in men’s grooming, haircare and mom-baby segments. This is after the conglomerate announced diverse acquisitions in 2021 which included brands like Miss Malini Entertainment group, Scoop Whoop, Baby Chakra, and Moms Co.
 
Sanghvi said that the buyouts will continue to be a focus for his company and that he is in advanced talks with the founders/ owners of firms he seeks to buy in 2022. He added that the next round of fundraise may not be an immediate concern and that a public listing is most likely to happen by Diwali, 2023.

Earlier this year, the Good Glamm Group raised $150 million in a Series D round led by private equity investors Prosus Ventures (Naspers) and Warbug Pincus, along with participation of various other investors. Edited excerpts.
 
BT: The acquisitions seem to be at the centre of your business model. We have also seen a similar strategy being deployed by the other stakeholders in the beauty and personal care segment? Can you elaborate on this trend?
 
Sanghvi: All of us in this beauty personal care business (BPC) has lot of amazing category tale behind us.

The industry in itself has so many factors going for it: first factor is GDP per capita is touching $2,000 right now. The BPC industry is exploding right now because everything above that is disposable income and one of the key areas to spend is the BPC and second factor is, India is highly under penetrated, so beauty personal consumption is one-third of Southeast Asian countries, like Vietnam.

Another important reason is that discoverability of BPC products on the phones has become easier for women . All these micro-indicators perhaps signal why BPC industry is doing so well in India right now.
When you look at Myglamm, it is four years old, but so are other brands. So all these brands have started their journey five to six years back. The brand-led consolidation is more prominent in BPC industry than elsewhere.

If you look at a company like Estee Lauder, they have seven brands that do $7 billion revenue each. Five of out of these were an acquired brand. Globally, if you see these brands, one can build one or two brands, rest has to be acquired. You acquire a brand then you use your expertise to scale them up, So what do you see in the industry is the players are getting consolidated, one off line distribution channel can serve your brand. In my case we have the network and pace that nobody had and top of it I have 150 million users like nobody had. A brand once hit certain scale and then struck to go to the next, they become a part of a larger group. This can help them to scale up.
 
BT: Is this the kind of roll-up e-commerce activity we have seen in the US and even in India?

Sanghvi:  We are not a roll-up player. We are building brands and they have to be nurtured. We build one brand and second brands take time to build, we are BPC domain expert, these are built through acquisition. If I will try to build a brand it may take time. We have the expertise, audience, we have value engine and then we scale these brands.

BT: But we are trying to make sense of diverse acquisitions Good Glamm group has done so far. From influencer to content to D2C brands.

Sanghvi: You are right, they serve different segments, ScoopWhoop is for males and Baby Chakra is for moms; they are serving different audiences. The Beauty Personal Care Product serve different audiences. We got these assets because of their audiences. The audiences allow us to build these brands
 
BT: So what other segments are you currently looking at from an acquisitions point of view?

Sanghvi: You will see doing us something on female hygiene, mom and baby, hair care, men grooming, skin care. We want to ensure that over the next three years we have a brands in each segment that are the top two brands in each of them.
 
BT: D2C market has seen a greater push with COVID-induced digital acceleration; Do you see a shift in the shopping behaviour? Do you you see further growth across the industry?

Sanghvi: Last year Diwali was much better than the Diwali before COVID came in. The physical retail is here to stay. Today 25 per cent of revenue comes from physical store that will continue to happen. If we look at online store it is also growing well. The consumer behaviour for buying shifted long back, Nykaa is the best example to explain the things better. It really laid the paths like ours. The Beauty Personal Care has done well during the lockdown and today also it is doing well globally, irrespective of online or offline.
 
BT: Would you attribute the growth across the BPC industry to the rise in purchasing power of women in India?

Sanghvi: Yes. There are factors like women are on social media, they can see what stars are having and they can order the same from the online stores. Now women are independent, they have their own
money to purchase their products. Today 65 per cent of my orders are from Tier II and III while Tier I is only 35 per cent The growth is happening from all segments of the society. All these are increasing the sale.
 
BT: Do you a plan to foray into live commerce?

Sanghvi: Live commerce is a great opportunity and we will be experimenting with it. We will be ready with our live commerce app by next mid-January. There are others like Myntra, Amazon, Flipkart with whom we will be working with them, they all are channel partners for us, we don’t compete with them.
 
BT: What about your offline reach? Are there any plan to expand your offline retail stores?

Sanghvi: Absolutely. If you see us offline, we are at 30,000 points of sales. Offline channels contribute only 25 per cent of revenue. In a country like India, the customers never treat you like a big brand until they see and touch you at neighboring store. For that we need to be omnichannel. Revenue will be only 25 per cent, but it will have an important role. We aim to expand our offline point of sales to 100,000 by March 2022, which could contribute to 30 per cent of our revenues.

BT:  How about an IPO?

Sanghvi: India is a right place to list the consumer business. We have made a plan that we are not going for IPO until we are generating some serious cash. We will be ready for IPO by 2023’s Diwali hopefully. Right now we don’t have any plan to go for an IPO.

BT: But businesses which aren’t yet profitable are listing on stock exchanges. Your viewpoint?

Sanghvi:  Every business is different and I don’t want to comment on other businesses as everyone has
different model of growth and profitability. We are into the business where the cross margin are very high. BPC business is similar to SAAS businesses across margins. If you got your marketing cost under control it is a business that has to generate serious profit. Within next year we will generate some serious cash.

BT: Nykaa listing has been a watershed moment for the industry? How important has it been for you all, for the stakeholders in the industry? How it has impacted you all?

Sanghvi: Nykaa has been a trailblazer for us. They did a hard part of convincing consumers to buy beauty products. We are happy with Nykaa’s success, it is inspiring for us.