E-commerce sales have surged in India since the pandemic, thereby offering new distribution options and changing the beauty market. One of the key e-commerce players in the sector is Purplle, which was founded in 2012 and became a unicorn in June last year with a valuation of $1.1bn. Purplle.com now claims to be one of India’s largest online beauty platforms with seven million monthly active users and selling 1,000 brands on its website and app. Having secured funding of $33m in June last year, which followed a $75m funding round in November 2021, the company says its ambition is to build a global multibillion-dollar beauty company from India. Purplle CEO Manish Taneja tells BW Confidential about the company’s strategy for the Indian market, the online business and the potential of the country’s beauty sector.
Purplle aimed first to attract beauty consumers in smaller towns, a strategy that goes against the usual route of targeting metro areas in India. What was the rationale for this move?
There were many reasons. We understood the smaller town consumers much better because we ourselves grew up in these towns. The question was also about how we manage the unique supply side for these consumers. For this, we built a differentiated, highly personalized digital shopping experience for consumers through our app by creating detailed user personas. This enabled customers to test make-up, and recommend products based on personality, keyword search, and purchasing behavior.
Most of our focus is on mass and masstige, with skincare being the biggest segment. Around 50% of our business is in skincare, about 33% in make-up and 10% in haircare. Premium accounts for less than 5%.
Today, Purplle has more than 1,000 brands reaching more than 18,000 pin codes across India. We’ve been growing typically at more than 70% year-on-year for the past three years, and faster in the years before that. Some 70% of our revenue comes from tier-two and tier-three cities.
What are your financial objectives now?
I feel it is important to have the confidence that if you’ve reached a billion dollars in valuation you can go to 10 billion dollars. Last year valuations were very high; we became a unicorn valued at Rs86bn ($1.1bn). But typically, we have goal posts around revenue in business, not around valuations. Our GMV (Gross Merchandise Value) was $180m in the financial year 2021-22 and we are looking at 40% growth to reach GMV of between $230m and $250m in the financial year 2022-23, which ends March 31 2023.
You have created your own brands, such as Good Vibes, StayQuirky and NY Bae. What has been the response to these brands?
Consumers like to be sure that what they are putting on their face, skin and hair is something they can trust, and often they believe in a brand philosophy more than anything else. We used data to make our way into this field. When we first launched Good Vibes a data science team took a call on which products to launch, the price points, and estimated how many units could be sold. It’s a mathematical problem. They know how many consumers come to us, with which skin concerns and which skin type.
Today on Purplle.com about 30% of our revenue comes from our own brands, which is the highest level that most beauty retailers will reach. These brands are built on high gross margins, like any brands from consumer-goods companies. They are the proof of Purplle’s strengths.
How do you see the role of data and analytics in gauging consumer trends?
What we’ve built is what you could call ‘the Bloomberg of beauty’. We know what is happening in the world of beauty from a trends point of view – whether ingredient specific, or concerns-specific. I can tell you that niacinamide is starting to trend in India, or tea tree oil is starting to trend. I can tell what is on the incline or on the decline, or whether people are looking for a problem that they can’t solve, for example, dark knees, or dark elbows. [Companies] don’t make products for these concerns. That’s how we built our private-label brands.
You’ve also made some key acquisitions in the past years, including retailer Faces Canada. How do you see the future of brick-and-mortar stores given the rise of e-commerce?
In early 2022 we acquired Faces Canada, a brand with 1,100 beauty advisors and 150 employees. We had never made an acquisition of this size, so integrating teams which are so different from us was a challenge.
We also sell our brands in offline stores and in our own Purplle standalone stores – with nine stores in the initial plan. Again, our choices have been more focused on the tier-two markets. The way we operate is that we do small experiments and try to perfect those experiments before zeroing in our clear targets which set the pace for us. At this time, we are experimenting with different stores and sizes and opening stores that are between 750ft2 to 2,000ft2 (70m2-200m2) and we are experimenting with malls and markets, and also a little bit with cities, as well as the smaller markets. We are doing the Delhi-NCR region, as well as Bengaluru and Mumbai.
More global brands are upping investment in India currently. How do you see this?
I think brands investing in India can do well as long as their price points makes sense for India, and if they choose the direct route and invest in their growth. Where else is the beauty market growing at such a pace?