This year-old Hyderabad-based startup’s beauty box subscription service is already profitable
Part of India’s largest incubator T-Hub, Glamego caters to women’s daily beauty needs through a curated collection of products from national, international, and niche brands.
At a glance
Sector: Beauty and personal care
Launch: March 2017
What are the two most common words in the fashion industry? Glamour and Ego. So when Lavanya Sunkari, 29, and Prabhakar Darakapalli, 37, decided to start up in the cosmetics sector, they thought Glamego was the perfect name – catchy and relatable - to women.
Glamego offers subscription-based beauty boxes every month with premium national, international, and niche brands valued at Rs 2,000 for just Rs 299 for six months. The startup offers different prices for different durations for subscriptions.
An MBA graduate with about 10 years of experience in marketing, Lavanya always wanted to be an entrepreneur. Over the years, the beauty conscious Lavanya wanted to make high-quality cosmetics and personal care items affordable.
Once she had the idea, she approached her business contacts, who were looking to start up. She met Prabhakar while working at Irish property venture Quinn Group in Hyderabad. An MS holder in Digital Media from the University of Bremen in Germany, Prabhakar was Vice president at AVEVA previously. “We understood during discussions that the market opportunity is very big, and with top-notch execution, we can make a difference,” Lavanya recollects.
Targeting women in the 25-40 age group, Glamego was launched with Rs 50 lakh from their personal savings, on Women’s Day – March 8, 2017.
Starting with no external funding, they wanted to turn profitable first. In a year, they have achieved that goal, Lavanya says, adding they were also among the 400 startups chosen to be part of the Global Entrepreneurship Summit in 2017.
The business model
The presence of thousands of products in the market makes choosing the right fit for hair and skin tough for women. Glamego aims to make this choice easier by providing four to five beauty products every month (from national and international brands).
“We enable women to experience a wide range of innovative products, which they would not have tried otherwise and include them in their daily routine. These products are always premium and expensive, therefore, should be tried before actually spending on them,” Lavanya explains.
Glamego curates the box from pre-selected products with the help of Q&A filled by subscribers.
Lavanya says beauty enthusiasts and influencers create a lot of content on these products, helping Indian women to understand them better and make wise purchasing decisions.
She adds that Glamego has strong technology integration with logistics partners and is capable of sending even 10,000 boxes a day with minimal man power requirement. They also a 5,000 square feet warehouse, where they procure inventory directly from brands.
Although Glamego sells some brands, this remains a key revenue area they have not concentrated on yet. Lavanya clarifies that they are not a marketplace.
“We keep the inventory in hand for quicker delivery. We start shipping on the 1st of every month for multiple-month subscribers, and delivery is done in 4-5 working days. We can send even 10,000 shipments in a day with our automated logistics dashboard,” she says.
The biggest challenge for Glamego while starting up was to get into the right space to start the business. Although it took four months, with the right pitch and selection process, they managed to get into India’s largest incubator T-Hub.
Lavanya says the cost of living in Hyderabad is low, and it offers a high standard of living and good quality manpower at lower cost as compared to other metros.
Glamego is now looking into data analytics and machine learning to target their customer base better.Using the data gathered so far, the startup aims to promote suitable products for customers and help brands to better their products and marketing strategies.
Lavanya says, “T-Hub is the key factor for our operational cost control, and we have been able to attract better talent much easier due to the amazing infrastructure here. As most brands are outside Hyderabad, initially we had to travel and convince them to get on board. But now it’s no concern as brands follow up with us to place their products in our box on a priority basis.”
A box of surprises
Glamego is associated with international brands like BellaVoste, Kronokare, Mcaffiene, and Manna Kadar, which have already launched products exclusively on their platform.
A team of 22 people spread across technology, marketing, social media management, influencer management, and customer service, Glamego worked hard to on-board brands. They had to be convinced that Glamego was not in the business of selling just the box, but of making the brand visible in the most cost-effective manner.
Glamego looks up to US-based Ipsy and Birchbox, which are based on the same model with 1.5 million monthly subscribers. Lavanya believes that the subscription model has a ripple effect and can influence consumer purchase behaviour online and offline.
“The subscription model is totally a sampling model. We put a combination of full-size and travel-size products to use the product for 15-30 days before a customer converts to a new brand or choose the right product. Brands understand that to make their product reach the maximum amount of right audience, a subscription box is the most cost-effective way,” she says.
Customers matter the most
With unique themes and an innovative social media marketing strategy, Glamego claims to have reached more than five million women online.
“There are more than 3,000 videos on social channels where they only talk and share the joy of what they received in their Glamego box. We get thousands of videos and posts explaining what they liked and disliked about products. We are coming up with a feedback system, which will get us closer to our subscribers on what they like and what they don’t,” Lavanya says.
Their learnings include that the packaging and look are significant. “We launched with brown packaging, but now we have revamped from normal boxes to reusable magnetic boxes. Every month we send different boxes and themes,” Lavanya says.
A glamorous future
According to research firm RedSeer Consulting, India will be one of the top five global markets for beauty products by 2025. The online market, which was worth $150 million in 2017, is expected to reach $1.6 billion by 2025 as per their study.
Glamego wants to exploit this huge opportunity and be the strongest in India before expanding abroad. (Lavanya says that they are already getting huge interest from neighboring countries.)
Currently, the startup claims to have around 2,00,000 registered customers and more than $1 million revenue. Lavanya adds that they have grown 15 percent month-on-month.
Although omni-channel retail is slowly becoming the norm, Glamego has no such plans.
Now in talks to raise $2 million in VC funding, their target for FY2019 is to expand the customer base four times. While competing with the likes of Mumbai-based Vanity Cask, Popxo beauty box, Globox, Fab bag, and My EnvyBox which follow similar models, Glamego is targeting one million women now. After fund-raising, the founders are planning to concentrate on upselling and modernising the website.