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Purplle’s offline bet

The online beauty marketplace plans to launch 10 stores this year

The opportunity in India’s beauty and personal care category is immense, as the per capita consumption is lower than any other mid-size economy.
The opportunity in India’s beauty and personal care category is immense, as the per capita consumption is lower than any other mid-size economy.

Purplle, which started as an online marketplace in 2011, is planning to set up offline stores, and is sprucing up offerings through acquisitions — the most recent being its acquisition of Faces Canada — to strengthen its position in the beauty and personal care sector. This market, which was valued at $16 billion in 2020, is expected to grow at 12% per annum to $28 billion by 2025, according to a RedSeer report.

Beauty play

Purplle’s offline retail blueprint includes 10 stores this year, and experiments with different store sizes and formats. The company plans to offer its entire online portfolio, comprising more than 1,000 brands and 50,000 products, in its stores. “It is important to have standalone stores in a market like India as 85% of beauty consumption still happens offline. There are products in the beauty segment that are not easy to grab online, like the right shade of foundation or compact powder. Besides, offline stores act as a massive brand building exercise,” says Manish Taneja, co-founder and CEO, Purplle.

In December, 2021, Purplle acquired cosmetics and skincare brand Faces Canada. “With Purplle at the helm of the operations, the plan is to make Faces Canada the second largest make-up brand in the country in the next three years. We aim to grow the brand at over 40-50% year-on-year,” says Taneja.

Purplle is also planning to expand into categories like hair care, hair appliances, perfumes and deodorants over the next two years. The company will also be bolstering its owned and acquired brands Purplle, Good Vibes, NY Bae, Carmesi, and Stay Quirky, among others, through marketing efforts and by building supply chain capabilities. Private labels contribute 30-33% of Purplle’s revenue.

Purplle’s customers fall in the 18-35 age group; 75% of its revenue comes from tier II and III cities. “We expect to end the ongoing financial year with an annualised gross merchandise value (GMV) run rate of Rs 1,400 crore. Our ambition is to keep growing at 70-80% year-on-year,” adds Taneja.

Physical strength

The opportunity in India’s beauty and personal care category is immense, as the per capita consumption is lower than any other mid-size economy. Therefore, there is a lot of headroom to spend money, says Arpit Mathur, partner, Kearney. He adds, “Consumers have started to shop online, but there’s still a big chunk of consumers that still prefers to shop offline, and try beauty products in the physical format. Hence, it is vital for brands to have both an online and offline presence.”

Analysts say that since Purplle already has a good consumer base online, opening stores on high streets or pop-up stores in malls could aid brand recognition. However, offline will not be an easy play. “Covid-related disruptions may halt or disrupt the brand’s sales plan. Beauty is a contested space so the cost of operations is high and the financial returns may take a longer time to achieve,” says Ankur Bisen, senior partner and head (consumer, food and retail), Technopak Advisors. A lot will ride on which markets Purplle enters initially, and what kind of inventory makes it to the stores.

To differentiate itself from other beauty retailers, Mathur says Purplle could offer a no-touch checkout option by which consumers can scan the product’s QR code and pay online. Additionally, he says, having a digital mirror in the store for consumers to try different shades of cosmetics without actually physically touching them could ease the shopping experience.

Having a healthy proportion of private labels is important for beauty retailers to ensure good margins and profitability.

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