Deal focus: MyGlamm leverages brand awareness

Most direct-to-consumer (DTC) beauty brands in Asia start out as e-commerce marketplaces, using established third-party products to build up a following and then launching their own offerings. India-based MyGlamm eschewed this route, seeking to be a brand from day one.

“We believed that if we were truly DTC, if we owned the customer, then we could understand her better than anyone else. And if we understood her better than anyone else, we could create products that are most relevant to her,” says Darpan Sanghvi (pictured), the company’s founder and CEO. “That meant we faced a tough job getting customers to our platform. I had to invest a lot in technology – more than any other beauty brand in India – and I had to invest a lot in marketing.”

MyGlamm now offers 800 product lines under five sub-brands across make-up, skincare, haircare, personal care, and bath and body. The company is attracting 250,000 new customers a month, with hopes of hitting 400,000 a month before the end of February, and it generates 95% of revenue from transactions completed on its own app and website as opposed to through third parties.

Investors are also taking more notice. A Series C round of INR5.3 billion ($71.1 million) closed recently, with a INR5.3 billion top-up from Accel Partners. Other participants include Amazon, Ascent Capital, Wipro, Bessemer Venture Partners, L’Occitane, Trifecta, and Stride Ventures.

Sanghvi identifies two watershed moments in the company’s journey. The first came in December 2019, when MyGlamm realized that its own-brands-only strategy was paying off and started thinking about how to achieve commercial sustainability. The business had grown fourfold over the previous 12 months, with an annual revenue run-rate of approximately $18 million. Customer retention and repeat buying rates were high, which was attributed to a strong product-market fit.

By this point, MyGlamm had grown from morphed from a single make-up brand into a master brand with three sub-brands. The original mass-market offering, MyGlamm, was joined by Lit and Manish Malhotra, aimed at the affordable and premium segments, respectively.

“This gave us access to three different consumer personas: Lit was for the younger fashionista girl who likes to express herself with a lot of color; Manish Malhotra was for the queen bee who wants a brand that reflects her stature; and MyGlamm was for the hardworking, multi-tasking Indian woman,” Sanghvi explains. He adds that cross-selling between the brands – for example, the Lit customer who aspires to become a Manish Malhotra customer – soon became a key focus.

The second moment was the acquisition of POPxo, a women-focused content platform that had several VC backers, in August 2020. MyGlamm had been considering M&A as a means of reducing customer acquisition costs since late 2019, but COVID-19 delayed action.

POPxo was always the number one target. It is the largest female content platform in India with 60 million monthly active users – which equates to nearly half of all female Facebook and Instagram users in India – 25 million social media followers, and 1.5 billion monthly page impressions. MyGlamm’s goal was simple: turn these people into customers.

“We insert MyGlamm very organically into those impressions and educate consumers about beauty through content. We insert MyGlamm products based on what the consumer is reading or watching, and then we get the consumer to transact on the MyGlamm app,” Sanghvi says. “That is the incredible moat we have built – no one else in India can match it. We have 88 million unique annual users, and it’s all organic through a content play.”

POPxo also owns Plixxo, a marketing platform with about 200,000 online influencers. They create user-generated content that drives awareness and traffic back to the MyGlamm platform.

The 250,000 new customers coming to MyGlamm every month are being acquired for less than $1 per head. Sanghvi estimates that beauty marketplaces and brands, respectively, are paying 5x and 10x more for traffic. The company broke even about three months after the POPxo acquisition.

The Series C proceeds will go towards recruitment, including a host of senior executives who have worked for the likes of Unilever and Myntra and have seen businesses scale. Other priorities include deepening the product portfolio – MyGlamm is a leading player in make-up, and it wants to do the same in other categories – and investing in a Silicon Valley-based data science team that can fully leverage the wealth of consumer information collected by the company.

Finally, Sanghvi wants to expand MyGlamm’s physical points of sale from 15,000 to 50,000 by the end of March. Most of these are run by third parties, but the company has its own retail staff operating in approximately 600. An experience store has opened in Mumbai and there are plans for a second in New Delhi, plus smaller kiosks in other locations. “We believe that in India if you are to be a brand of scale you must have a significant offline presence,” he adds.

Nykaa, a PE-backed beauty marketplace that launched private-label brands, recently filed for a domestic IPO. MyGlamm is currently focused on execution, but it expects to be ready to follow suit within two-and-a-half years. Meanwhile, growth is likely to continue apace, spurred by strong macro fundamentals and the emergence of more DTC players capable of challenging global brands.

“There are more people with mobile internet in India than there are who buy beauty and personal care products,” Sanghvi says. “We are going to leapfrog other countries because of that deep internet penetration and because women discover beauty brands via social media. GDP per capita consumption of beauty products is $1. That is one-third or one-quarter of the level in Indonesia and Vietnam.”

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• Topics
• South Asia
• Consumer
• Expansion
• India
• Accel Partners
• Amazon
• Trifecta
• Ascent Capital India