Online BPC companies saw steady growth in private label business in 2018 and in 2019 are poised to expand private labels rapidly
Published on: Aug 2019
- Online BPC (beauty and personal care) space saw the rise of private labels in 2018, with their share reaching double digits as initiatives from Nykaa and Purple bore fruit
- We expect private labels (which generate a 30% gross margin) to account for more than 15% of online beauty GMV in 2019.
Online BPC (beauty and personal care) market poised to grow 100+% y-o-y in 2019, with improving unit economics
Published on: Jun 2019
The online beauty landscape is heating up, with the rapid growth of both horizontals and verticals. While horizontals drive growth by bringing onboard many first-time online beauty shoppers and focus on the personal care category, verticals are playing a key role in educating and premiumizing the beauty consumption, with a higher share of make-up and skin care categories.
A lot of the growth is organic, driven by content/blogs. Which means that the category is likely to avoid the discount-driven growth models that other categories struggled to move away from. Given this trend, we expect the online beauty category to grow by triple digits in 2019, as even as its overall contribution margin remains stable or slightly improves y-o-y.
Online fashion category records 66% annual growth by effectively tapping into Tier 2+ city opportunity
Published on: Jun 2019
Online fashion players, both horizontals and verticals, have been successful at reinventing themselves to cater to the needs of the Tier 2+ city consumers.
This success is reflected in the strong 66% annual growth recorded in Q1 2019, which sets the industry on course to have a USD 10 Bn exit GMV run rate at the end of the year 2019. This would be a landmark indeed, putting the online fashion market within touching distance of a 10% share of overall fashion, a feat achieved by few categories in India’s online retail landscape.
The vertical online fashion players have better unit economics compared to the same categories for the horizontals
Published on: Oct 2018
The horizontals are still running good discount schemes for customer acquisition in the fashion category thus resulting in negative contribution margins. The verticals have a higher focus on private labels which attract higher margins which are driving the positive contribution margins in their favor.