UK-based consumer goods giant Reckitt Benckiser has led the funding round which also saw participation from angel investors
Bombay Shaving Company will look to expand beyond metros and launch more product lines to build on the 40% quarter-on-quarter growth, says founder and CEO Shantanu Deshpande
Currently, the company earns 20%-25% of its revenue through retail sales, with the rest split equally between its native site and third-party ecommerce platforms
Holed up in their homes amid the Covid-19 pandemic and the resultant countrywide lockdown between March to May last year, one would imagine that personal care and beauty would be the last thing on the minds of buyers. With minimal social obligations, and physical distancing protocols in place, the burden of putting up an appearance would have been lifted from the shoulders of many. Or so one would think. Shantanu Deshpande, founder and CEO of Visage Lines, which owns and runs the D2C men’s grooming brand Bombay Shaving Company, feels that the pandemic has accentuated customers’ consciousness of personal hygiene and grooming.
Deshpande says with rising awareness among consumers, brands in the personal care and beauty industry need to work towards further specialisation of their products. Gearing up for these changed market conditions, Bombay Shaving Company has raised INR 45 Cr in a funding round led by Reckitt Benckiser, a UK-based consumer goods company which makes health, hygiene and home products. The round also saw participation from individual HNIs such as Rajesh Sud of Bharti Enterprises, Anjali Bansal, founder of Avaana Capital, and Kuldeep Jain, managing director of CleanMax Energy.
New Products On The Anvil
“Customers want very specific solutions so every sub-category will become very specialised. Basic face washes such as lemon and neem will make way for solution-oriented products such as those that claim to be suitable for acne, dark skin, bearded faces, or that claim to smoothen wrinkles, among various others, some of which are already there in the market,” says the founder.
Founded by Deepu Panicker, Raunak Munot, Rohit Jaiswal and Deshpande, Bombay Shaving Company (BSC) will use the funds to launch three new consumer brands in the market, invest in marketing and branding and penetrate deeper into the market, beyond the metros. The CEO says that the company would also invest more in research and development (R&D) and grabbing retail presence. He believes the personal care industry will see increased demand for non-chemical, vegan products and that a customer’s loyalty to a particular product/brand will make way for greater propensity to experiment across brands in the near future.
The pandemic unleashed tailwinds for BSC, with the brand’s product portfolio continuing to sell online amid the lockdown. Currently, the company earns around 25% of its revenue through retail sales, with the rest split equally between its native site and third-party ecommerce platforms at around 35% each. Deshpande explains the philosophy behind the omnichannel D2C strategy, which is at the core of most new-age brands in India.
“The D2C website is where you’ll find most of our branding material. It is the one-stop-shop for our most loyal customers. Selling on Amazon and Flipkart is key because we are a young brand, so we have to put ourselves out there and acquire new users. That becomes a challenge for us in 2 Mn retail stores where customers would naturally prefer more established brands placed prominently on the shelf,” he says, adding that the company’s revenue has grown 3x when compared to the pre-Covid sales.
Personal Care Brands Up The Ante
Excessive competition within the emerging space of men’s grooming has seen India find homegrown brands as alternatives to the established global players. Besides Bombay Shaving Company, The Man Company, Ustraa and Beardo have emerged as some of the most popular names in the segment. True to Deshpande’s analysis, each of these brands started out with limited offerings, but have since expanded their product portfolio to include face, hair, beard and body care solutions — a full-stack men’s grooming line if you will. Tellingly, it’s a far cry from the days when most men relied on roadside barbers as their go-to grooming guides.
To counter the competition, Bombay Shaving Company has come up with women’s personal care and grooming products as well, which include two different razors. The five-year-old company claims that its women’s line has performed exceedingly well and that the brand could well launch more women’s personal care products in the future.
But how does a young D2C brand operating in a cluttered segment with plenty of seasoned players, ensure quality checks as it looks to scale up its inventory and expand the product line?
It all comes down to controlling the manufacturing. BSC’s products are manufactured in India but outsourced to local players, which the company claims are best-in-class. The company says that it ensures quality by maintaining oversight over every aspect of the procurement supply chain. “So if it’s a shaving cream product, we know where the cap, tube, formulation, every raw material, fragrance etc comes from. We do the quality checks for all these components,” Deshpande explains.
Taking notice of certain complaints about its products and their quality on social media and consumer forums, Deshpande says as the company scales up, getting products in 60-90 development lifecycle days has become a need. And while the company has managed to achieve this, maintaining quality becomes a challenge in the process. “Our major focus area is to ensure that consumer satisfaction scores go up. Sometimes we may drop the ball. But we are looking to expand our capabilities by hiring more people to tackle this challenge,” he says.
The Money In The Men’s Grooming Game
This is the fifth round of financing for the company, which also counts Sixth Sense Venture Partners and Colgate Palmolive as investors. According to data from Crunchbase, before the recent funding, the company had raised $9.5 Mn (INR 69.49 Cr) in four funding rounds from 12 investors.
Bombay Shaving Company is yet to turn EBITDA positive. In the fiscal year 2018-19 (FY19), the last available financials for Visage Lines Personal Care Private Limited — the parent company of Bombay Shaving Company — the company recorded a revenue of INR 8.6 Cr, a 106% year-on-year (YoY) growth. However, the company saw its net loss increase by 32% YoY to INR 8.3 Cr.
“We are at the growth stage and growing 40% quarter on quarter. So with the investments we have, it’s hard to become profitable, but the good part is that we have excellent gross margins and we are expecting to inch towards profitability by the end of this calendar year,” says Deshpande.
Bombay Shaving Company plans to scale its operations to 150 Cr top line in the next fiscal. It is also expanding rapidly in offline retail distribution as the post-Covid footfalls ramp up. “As we build omnichannel revenue streams we are cognisant that brands will be scaled through strong digital and retail distribution. Working with strategic partners over the long term will give us significant leverage in establishing ourselves in the Indian consumer ecosystem,” says Deepak Gupta, the chief business officer at Visage Lines.