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Reckitt invests in Bombay Shaving CoJanuary 28, 2021
Reckitt invests in Bombay Shaving Co
Bengaluru/Mumbai: Global consumer goods company Reckitt Benckiser is leading a Rs 45-crore strategic investment in homegrown grooming products venture Bombay Shaving Company. British firm Reckitt’s American rival Colgate-Palmolive had invested in the four-year-old firm in 2018. This backing from two of the world’s largest consumer products firms shows their desire to grow the category and tap into the youth-oriented brand space in India.
Bombay Shaving, which started as an online venture, plans to utilise Reckitt’s strategic expertise to expand in offline channels as well as for brand-building. Reckitt’s brands include Dettol, Harpic, Mortein and Strepsils. Its SVP (e-commerce, digital, and ventures), Arjun Purkayastha, will join the board of Visage Lines, which runs Bombay Shaving. Colgate-Palmolive already has a board seat in the firm.
“Through Reckitt, we get an understanding of optics, cities and consumer profile. This is hugely valuable for us. We are now focusing significantly on offline distribution. We will work with their sales team and figure out off-take in different cities directly. Apart from that, we also get R&D insights,” said Visage Lines founder and CEO Shantanu Deshpande.
Reckitt’s investment indicates the interest large global brands have in new brands that have built their presence through online platforms. French consumer major L’Oreal is an investor in venture capital firm Fireside’s new fund, which invests in such online brands. Previously, Marico acquired men’s grooming startup Beardo. Procter & Gamble (P&G) had also announced a Rs 400-crore ‘India Growth Fund’ to work with existing and new suppliers to boost local manufacturing of finished products.
Increate Value Advisors founder & CEO Milind Sarwate said large companies operating in the consumer space would certainly be more and more open to such investments. Sarwate said it is not possible to nurture a nimble, Gen Z kind of business unit within a large organisation. Therefore, companies would look at achieving the same effect through a separate unit or an alliance.
“Brands that FMCG companies are investing in today are those they would not find easy to develop at a fast pace organically. There is also some glitz associated with the involvement with a new-age brand or startup. For a global player, the monetary cost of such an investment in India is not very significant. The valuation is attractive in the context of the perceived potential. In the long run, such investments could yield handsome returns,” said Sarwate.
Bombay Shaving currently has 75% of sales coming from the online channel, with equal contribution from its own platform and marketplaces like Amazon India and Flipkart. “We are in a category which needs to be where the consumer is (online or offline). We are at 12,000 stores and plan to get to 50,000 stores in 30 cities by the end of this year,” Deshpande added. A host of other brands that started as online ventures, like earphone maker boAt, are also expanding offline distribution.
Deshpande said his startup plans to launch three new brands in the personal care space to broaden its positioning beyond a male-oriented brand. Women’s beauty and men’s make-up are some of these potential segments. “It will be a sharper brand positioning, rather than one-for-all,” he added. Bombay Shaving has clocked sales of just under Rs 100 crore till date and is aiming for Rs 150 crore by December 2021.