Acquisition is a buzzword these days in the boardrooms of India’s growing tribe of digital-first companies. Prompted by the ever-expanding opportunities that the country offers with its significant share of working millennials who are not afraid of experimenting and are often willing to spend on new brands, firms with deep pockets are leaning on acquisitions to grow faster.
Good Glamm Group, which owns multiple brands, including its flagship direct-to-consumer beauty brand MyGlamm, is on a shopping spree, too, having recently added digital media firm ScoopWhoop Media and mom-baby brand The Moms Co. to its kitty.
“India does not have enough depth wherein one category or one brand can do a couple of thousand crores in revenues. A skincare brand can get to ₹500-700 crore in revenues at best. If you want to build a $1-billion revenue company, you need to own 8-10 brands, each of them making ₹500-700 crore in revenues or maybe ₹1,000 crore,” group founder and CEO Darpan Sanghvi told Fortune India. The group has internally set a target of hitting $250 million in annual revenue run rate by the end of FY22, from the current $120 million.
The company is looking to build a sizeable beauty and personal care (BPC) business as the “digital-first version of the likes of a P&G or Unilever”, adds Sanghvi. It has lined up a ₹2,000-crore war chest [₹750 crore in cash and the balance in stock and earnouts] for acquisitions. At least another four more are on the cards, and according to Sanghvi, a buoyant market sentiment is likely to help the firm close the deals by the end of December, way earlier than the initial timeline of March 2022.
Sanghvi built MyGlamm, which acquired POPxo, a digital community for millennial women, influencer marketing platform Plixxo and parenting platform BabyChakra, all within a span of one year ending August 2021. In a recent restructuring, individual companies were housed under one entity, thereby forming the Good Glamm Group.
To differentiate itself from the pack, the group is stitching up a content-to-commerce play, wherein the strategy is to have a library of sharp, targeted content, to leverage its reach and get more consumers to buy its products. The acquisition of ScoopWhoop, which has around 70 million users every month — 70% of whom are men — and POPxo that claims to be followed by 88 million women, is expected to give the group a wider play within the content space. Having a strong content portfolio also creates avenues for brands to target new users and accordingly add to their product range. For instance, with ScoopWhoop in its fold, Good Glamm Group is looking to foray into the male grooming segment, which offers a $1.5-billion market opportunity. “Getting users through content is the most effective and cheapest way of capturing them. Our aim is to expose users organically to products. If we can place a product within a content piece contextual to the story that the user is reading, it is the best way to expose the user,” says co-founder Priyanka Gill.
The digital-first conglomerate plans to make hefty investments to scale up its acquired brands in terms of geographical reach and choice of products. An offline distribution network spanning 20,000 points of sale terminals is expected to come in handy. “It would have taken me years to build my own offline distribution network. Being part of the Good Glamm Group has accelerated our journey of not just discoverability through content, but conversion through our D2C stack and offline as well,” says Naiyya Saggi, founder and CEO at BabyChakra, who is also now a co-founder with the Good Glamm Group.
The company is open to evaluating acquisition of offline brands as well, says Sanghvi. It is gearing up for an initial public offering (IPO) by the end of 2023 or early 2024.
“The strength of traditional FMCG companies was their offline distribution. We are saying the currency of that future is the digital reach to a consumer,” he adds.