Male grooming's missed potential: Why FMCG giants are betting on digital brands despite slower growth

FIle photo

India’s male-grooming sector is yet to deliver on its early promise, despite high expectations and substantial investments, say analysts. However, top fast-moving cosumer goods (FMCG) companies are still bullish on the segment.

Inspired by global success stories like Dollar Shave Club—acquired by Unilever for $1 billion just four years after launching—Indian brands such as Bombay Shaving Company and Beardo entered the market in 2016 with a digital-first approach, sparking interest from major FMCG players.

However, growth in the category has not met expectations. According to an October 2024 JP Morgan report, the Indian male-grooming market is worth Rs 15,100 crore, with a CAGR (compounded annual growth rate) of 6 percent from 2019 to 2023. Though decent, it is far from the game-changing scale investors had anticipated.

India’s male-grooming products market was valued at $2.1 billion in 2023 and is projected to reach $4.1 billion by 2032, growing at a CAGR of 7.2 percent, according to IMARC Group. Globally, this market was worth $58.46 billion in 2023, and it is expected to reach $61.62 billion in 2024 and $85.53 billion by 2032, with a CAGR of 4.18 percent, as per Fortune Business Insights.

Over the years, the male-grooming sector has moved beyond traditional products like razors and shaving creams to include a range of skincare, haircare, fragrances, and wellness items such as beard oils, moisturisers, anti-aging serums, hair styling gels, and body wash.

Acquisition-led show

Since 2017, acquisitions in this niche category have been rising as FMCG giants look to capture a share of the premium market. Younger, male-focused D2C brands present a strategic opportunity, particularly as traditional offerings face a slowdown.

Companies like Emami and Marico, which already had male-grooming brands in their portfolios, have turned to acquisitions to expand into the premium space. Emami, which acquired The Man Company, expects a growth rate of 20-25 percent in the category this year -- a notable target even as men-focused categories struggle to gain scale.

COVID-triggered promise

The high hopes around male grooming were initially driven by the post-pandemic rise in self-care and well-being products, which expanded consumer spending in the category.

These digital-first brands, targeting a financially influential segment, generated significant initial traction. Yet, despite the promising numbers, category growth has not accelerated as expected, raising questions about sustainability. According to Mayank Rastogi, Markets Leader for Strategy and Transactions at EY India, growth in the male-grooming segment has been underwhelming and these businesses have had to launch wider portfolios to gain meaningful scale.

Bombay Shaving Company, which counts Colgate-Palmolive and Reckitt Benckiser among its investors, saw its net loss widen by 1.8 times for the financial year ending March 31, 2023, as it ramped up advertising to expand its offline presence.

Online presence alone not enough

In its October report, JP Morgan noted the importance of continuous improvement to remain relevant in India’s fast-evolving market. Many brands that initially thrived online are now being pressured to establish an offline presence to capture mainstream consumers. According to Rastogi, “the segment would continue to witness deals, especially as new-age companies struggle for capital and market access.”

Emami’s combined revenues from The Man Company and Brillare reached around Rs 225 crore, with Brillare’s smaller size driving faster growth.

Together, the two brands are expected to contribute around Rs 275 crore this year, accounting for approximately 8 percent of Emami’s revenues.

Emami to continue pursuing inorganic opportunities 

Emami has stated its intent to continue pursuing inorganic opportunities to bolster its growth in the sector, citing a strong balance sheet to support such expansions. In its first-quarter earnings call, Emami noted, “We aim to grow these brands by 20-25 percent and have more acquisitions in sight as part of our long-term strategy.”

Similarly, Marico, which acquired full ownership of Beardo in 2020, is aiming for double-digit EBITDA (earnings before interest, tax, depreciation and amortisation) margins for the brand this year.

Marico's moves

Marico has also begun pivoting Set Wet, its own male-focused grooming line, toward a digital-first strategy, investing in online content to strengthen its appeal in the segment. The company has committed to replicating Beardo’s growth model and aims to achieve double-digit EBITDA margins for its men’s grooming portfolio by FY27.

While digital channels have provided these brands a foundation, sustained growth may depend on mastering offline channels. FMCG companies with existing retail networks are working to integrate the digital appeal that initially attracted consumers to these D2C brands. The question remains whether the category can achieve the anticipated scale, or if it will remain a collection of niche acquisitions in a sector that has yet to live up to the promise.