I was recently asked whether a business in line with ‘The Dollar Shave Club‘ is relevant in India?
What is Dollar Shave Club (DSC)?
DSC is a now popular subscription-based shave club operating in the US, where in one needs to become a member and then every month you get a select number of razors and blades for usage. The problem that DSC is trying to solve:
- Extremely high prices of shaving razors and blades – largely attributed to marketing dollars spent by brands like Gillette.
- Push for unrelated feature such as lamp etc at the back of razor in name of innovation and thus higher prices
- Adopting of artificial intelligence to enable purchase of right set of blades etc for the skin type rather than going for a one size fits all approach
Here is a rather animated video of the CEO of DSC:
Success of DSC:
- Clocked $200 MM in revenue within 5 years of its inception
- Sold to Unilever for $1 Billion in all cash deal
- Goes head-on with Gillette, a P&G Brand
Its no surprise that it is drawing people’s attention in markets all over the world.
The Indian Shave Market:
The Indian Shave Market, specifically the razor market, is around Rs. 2000 Crore growing at a CAGR of 10% YoY. More details of the market here.
The dominant players are same the global market players with Gillette taking the lion’s share of the total market.
Below is the list of some of the brands active in shaving razor and shaving kit market in India:
- 10. Laser Shaving Razor
- 9. Ameego Shaving Razor
- 8. Pearl Shaving Razor
- 7. Personna Shaving Razor
- 6. SuperMax Shaving Razor
- 5. Merkur Shaving Razor
- 4. Wilkinson Sword Shaving Razor
- 3. Dorco LetsShave Shaving Razor
- 2. Philips Shaving Razor
- 1. Gillette Shaving Razor
Get more details here.
New entrant LetsShave.com which entered in the market only a few years back has jumped to prominent brands in shaving market in a short duration backed some sharp marketing and tie-ups with international companies.
The overall personal grooming market in India is at an inflection point where it can go from current $6.5 Billion to $20 Billion in next 7-8 years.
From an opportunity stand point the proposition to enter the shaving market looks appealing and seems to have good headroom for new players.
Subscription as an alternative Delivery Method:
The DSC relies on subscription as the alternative delivery method over traditional trade and transaction sales for e-commerce. While the biggest advantage of subscription model is that the business has a captive customer base, the disadvantage is the limited options that the company can build around the subscription models. Not everything can be subscription driven.
Indian customer is infamous for being extremely price conscious. However, with success of Amazon Prime, Flintobox and few other subscription models, there seems to be a growth trend in the market that has awareness and is willing to adopt this delivery model.
The Indian Personal grooming market looks promising and, particularly, the shaving kit and razor market looks equally promising over the next few years. Besides, the Indian consumer preferences are shifting and more faith is seen now in the online and e-commerce business models. The customer is evolved to take up new delivery models like subscription for products too.
New companies like LetsShave.com have demonstrated that quick gains can be made in the market with value differentiated offering and with some smart marketing.
It can therefore be conclusively said that starting a business in shaving in lines with The Dollar Shave Club is worth the risk.