Bombay Shaving Company Goes Offline
When consumer firms were strengthening their online business during the pandemic, an Indian upstart did quite the opposite. Bombay Shaving Company, born as an online brand in 2016, began expanding reach through brick-and-mortar stores.
The maker of shaving creams to beard oil, owned by Visage Lines Pvt., sensed an opportunity as larger peers focused on e-commerce when one of the world’s harshest lockdowns halted store visits.
“Every modern trade store was looking for new brands and ways to engage their own customers. It definitely has created a change and that is good for us,” Shantanu Deshpande, founder and chief executive officer at Bombay Shaving Company, told BloombergQuint in an interview. “They (stores) were getting squeezed by their larger clients and we decided this was the best time to negotiate long-term deals, margins, and marketing investments.”
Bombay Shaving Company, backed by two rivals Colgate Palmolive India Ltd. and Reckitt Benckiser India Ltd., saw the share of offline sales jump from 10% prior to Covid-19 to 25% now. It’s now available in more than 15,000 stores in 25 cities, with Metro Cash and Carry contributing 17%, said Deshpande said.
All those gains came when Indians bought everything from staples to medicines online during the lockdown, accelerating the growth of the nation's digital economy expected to hit $1 trillion by 2025. Yet, bulk of the consumption still happens offline. E-commerce contributes 7.5% of the Rs 4.5 lakh crore ($65 billion) worth of consumer goods sales in India, according to Nielsen India. And the industry is driven by general trade, or neighbourhood mom-and-pop stores.
“I feel the online froth will go away in the next three to six months; it’s not going to be as exciting as people think it is,” Deshpande said. “We aren’t going to become China in two years in online penetration.”
That’s not to say that online consumption didn’t help Bombay Shaving Company. “We are four times bigger than what we were pre-Covid and growing much faster,” said Deshpande. The company targets to reach one lakh stores in 100 cities in the next two years.
Bombay Shaving Company is looking beyond the men’s grooming segment and target the entire personal care category with four new brands. It just launched hair oils and is considering shampoos.
“We know that Bombay Shaving company is a shaving brand for older men,” Deshpande said. “We want to launch a beard brand for younger men; we are launching a brand for sanitisation; and a women’s personal care and beauty brand as well.”
The growth explains interest of large consumer goods makers Colgate-Palmolive and Reckitt Benckiser in the company. Bombay Shaving Company is valued at Rs 229 crore after the last round of investment by Sixth Sense Ventures, according to Tracxn, a venture capital database.
Colgate invested Rs 28 crore for a 17.9% in the company in the last two years, and Reckitt Benckiser has recently invested Rs 20 crore, according to data by Tracxn. The two companies bring more than just capital.
“There are many people who will give you capital. But their (Colgate’s) senior executives have collectively so many years of experience in distribution and they have their relationships. They know exactly what distributor, retailer, what consumer segment works in which locality, they know that, that intelligence is there,” Deshpande said. “We can obviously learn from that.”
He cited the example of procurement from common manufacturers and vendors. Since Colgate is the world’s largest procurer of tubes and Bombay Shaving Company also packages its product in tubes—it works. The toothpaste giant’s teams help negotiate costs for it, according to Deshpande.
“We would never get a good cost on procurement of tubes the way Colgate does considering our volumes are lesser than Colgate,” Deshpande said. “Because there is some relationship there, we have collective discussions and benefits come to us because of the relationship that we have.”
Then there’s the distribution network that Bombay Shaving Company can leverage.
“Senior folks in the Colgate sales teams have helped us out multiple times with what distributor to use, how do you draft a scheme for a modern trade outlet, how do you own a shelf in the grooming category for men,” he said. “Stuff like that which if you have to learn on your own can take a lot of time. They already have the knowledge, and they share it with us.”
Reckitt Benckiser is a recent investment and interactions have been limited so far, he said. “But they are a patient, long-term investor.”
Colgate declined to comment.
“Our investment represents a commitment to bring the best of two worlds together—BSC’s expertise in digital-first brands with strong e-commerce capabilities, and RB’s expertise in branding, manufacturing and global scale,” Arjun Purkayastha, senior vice president, e-commerce, digital and ventures at Reckitt Benckiser, told BloombergQuint in an emailed response. “Together, this combination of complementary skills sets us up for huge success,”
According to Deshpande, businesses like Bombay Shaving Company can, in turn, be a marketing channel for large companies.
“Premiumisation is happening more online than offline,” he said. “They like the fact that we’re sophisticated, extremely agile, and young, and they feel like we can rub off those things onto their digital and commerce teams.”
Watch the interaction with Shantanu Desphande here: