News broke earlier today of British multinational consumer goods firm Reckitt Benckiser (RB) leading a Rs 45 crore funding round in Visage Lines Personal Care, which owns personal grooming brand Bombay Shaving Company. Several individual HNIs, including Anjali Bansal from Avaana Capital, also participated in the round. The investment by RB marks the fifth round of financing for the company, which has earlier seen investments from the likes of Sixth Sense Venture Partners and Colgate-Palmolive. Bombay Shaving Company was founded in 2016 by Shantanu Deshpande, a former McKinsey & Co consultant. According to business research firm PGA Labs, the men’s grooming market in India is expected to be worth around $5.5 billion by the end of the year.
In an interview with MoneyControl, Deshpande talks about his capital deployment plans, the evolution of the personal grooming market, especially with regard to men, and how the company weathered the pandemic.
With the latest capital infusion, what is the total capital raised by the company till date? And how do you plan to deploy it?
We’ve raised Rs 120 crore since we launched in June 2016. This includes primary funding of Rs 95 core, and secondary transactions worth about Rs 25 crore. Among the things that we want to do is to ensure we are invested in offline distribution and availability of our products across all channels. We will also be investing in R&D and product development because innovation lifecycles in the personal care segments are very short. You have new product categories being created within three to four months and players are able to achieve sizeable numbers. We are also building out other brands in addition to Bombay Shaving Company. In many ways, the idea is to operate like a proper FMCG company.
What kind of strategic value add does RB bring to the table as an investor?
Reckitt Benckiser are category creators, whether it be with home cleaning such as Lysol, or with condoms with Durex, slightly pharmaceutical products such as Itch Guard, and even, counter-intuitively, with shoe polish in the form of Cherry Blossom. They are known to identify emerging categories very early and launch amazing solutions. That is an exciting skill and we are eager to learn, and benefit from their expertise. Plus, RB has a strong presence in India, and they have a very large distribution footprint which bodes well for us. They are also keen to work with us in global markets.
You are aiming for a Rs 150 crore topline (revenues) in the next fiscal. What will be the primary drivers of this growth?
We want to be among the top three brands across e-commerce in our category. We are looking to penetrate deep into different cities in India. We are available in about 10,000 stores in 20 cities at the moment, and our plan is to be available in over one lakh stores by the end of the year. We will also launch more relevant and effective solutions for our consumers across categories. These will not be restricted to just shaving, but will also include beard care and skin care. The other big area of focus will be customer acquisition. We will not only aim to attract a larger number of customers, but also premiumise our offerings so that the average order value is high.
How has the market evolved since you started out in 2016?
Men are today way more interested in grooming, and the internet is a big driver of that interest. Men might not talk about their skin care regimen with other men, but they are on YouTube searching for the right shaving cream for their skin, and how to handle acne. Again, their requirements are now becoming very specialised, so the products they choose could range from all-natural to non-chemical or vegan. The categories are becoming very evolved and very specialised and consumption is becoming sophisticated.
How did Bombay Shaving Company weather the lockdown?
The first couple of months were difficult — our warehouses were shut, there were no sales. But things picked up after the lockdown was gradually lifted and orders started picking up across platforms. People had to be well-groomed for Zoom calls, and while consumers might not have spent money on new clothing or footwear, they were keen on pampering themselves with products such as the ones we sell. Moreover, the women’s hair removal products market really took off during the pandemic. We tied up with a company in Israel and developed a razor especially made for women last year in just three months. It is now among our top-selling products. So, yes, there were many silver linings in this pandemic for us.
What are the areas that are as yet untapped in the personal grooming segment in India?
Male make-up is an area that looks interesting. There is a huge demand among college kids. Plus, there is also the opportunity to create specialised, bespoke products. For example, if you life in a coastal region, you would want your skin/hair/beard-care regimen to be different from someone living in another part of the country. I also feel that there will be many subcategory penetrations. Take deodorants, for example. Everyone uses them, but there has been no real differentiator so far.