SoftBank-backed online grocery delivery company Grofers looks to have expanded into the beauty and wellness vertical with Orange Something.
Inc42 noted that Orange Something was launched in July 2019 as an ecommerce platform for personal care and beauty products across India. A source within the new outfit told Inc42 that Orange Something is a personal interest project for Grofers cofounder Saurabh Kumar. However, he has entrusted the project to Ankur Saxena, the VP of technology at Grofers, who is heading a 15-20 member team within Grofers.
Our source added that while Orange Something (OS) is a Grofers startup, it is currently being run to test market feasibility and growth possibilities. However, the new business doesn’t want to leverage the Grofers name and is testing the waters as a separate brand.
We noted that on Twitter, Grofers cofounder Saurabh Kumar and employees from engineering and other teams follow the Orange Something Twitter account. The company has 22 followers on Twitter but has a larger presence on Facebook and Instagram with over 4000 followers on both.
Orange Something: Direct To Consumer Model
Orange Something is already recording over 2000 beauty product orders per day for the last three months, according to our source. The source also claimed the company is seeing a 30-35% repeat order rate. This can be directly attributed to dirt cheap prices for the beauty products, which should be enough to attract customers.
The company is focussing on creating loyal customers and relying on word-of-mouth marketing by offering great discounts.
As for the business model, Orange Something claims to offer products directly from manufacturers to customers. It is following a contract manufacturing model and is involved in placing custom orders with its manufacturing partners and ensuring quality products.
The customer reviews across social media platforms seem to be a mix. While several customers have appreciated the quality of products at the price point, others have complained about delays in delivery or missing product pieces.
Whose Company Is It Anyway?
While the source told us that Kumar is only peripherally involved in the business despite it being a ‘personal project’, there are a few questions about how the business has been floated. MCA documents reveal the OS was founded in 2017 by SSC Tradecom Private Limited, with Bhupal Singh and Baldev Singh as directors. Incidentally, this is the only company where Bhupal Singh and Baldev Singh hold directorships.
Grofers has raised $501.8 Mn over multiple funding rounds and is one of the two grocery unicorns in the country. Whether Orange Something is a Grofers subsidiary couldn’t be ascertained. The Inc42 source was also not in the know about the funding history or the source of initial investment for Orange Something.
Grofers founders Albinder Dhindsa and Saurabh Kumar did not respond to Inc42’s questions about Orange Something. Grofers VP of tech Ankur Saxena did not respond to Inc42’s questions about the ecommerce platform. We also reached out to Grofers, who declined to comment on Orange Something.
India’s cosmetics and cosmeceutical market is expected to register an annual growth of 25% touching $20 Bn by 2025. A report claimed that the Indian beauty industry is looking towards a market value of $12.4 Bn (INR 80K Cr) by 2017-2018 and is expected to grow at a rate of 15% to 20%.
Venturing into beauty vertical, Grofers and Orange Something will compete against larger players such as Amazon, Flipkart, BigBasket as well as Nykaa, MyGlamm and private label startups which have made a name in beauty products. While many of them adopted the classic marketplace model, with its focus on contract manufacturing, Orange Something does have a price advantage, but its products don’t seem to have the same appeal as products from larger cosmetic brands, which are easily available on rival platforms.