Merely had these three IIM Ahmedabad graduates during their college days realized that a problem of looking for an authentic make-up kit for sister's marriage, beard oil to get interview-ready and organic anti-dandruff hair oil to prevent hair fall, will one fine day lead to genesis and incubation of Gorg.co.in, India's exclusive beauty & personal care brand aggregator. Operating into both B2B and B2C spaces with a vision to have an omnichannel play, the company focused on creating beauty as an experience for the customers.
As per market research conducted by the Gorg team before incubation, a whopping 89% of respondents across Mumbai, Hyderabad, Bangalore & Chandigarh wanted to look good, which also accounts to being Gorg's tagline today. In countries like Thailand, Indonesia, Czech Republic, Poland and Romania among the others, beauty products and essentials are considered as important items for daily use. However, choices are limited as the spoken about market remains unstructured and relies heavily on brick & mortar.
According to the team's evaluation, in this domain, the USA leads the pack with $89.9b of revenue in 2018-19 through selling beauty products & services. And, India currently stands at $14.1b, with an immense growth potential of 9.2% YoY. Moreover, this is just the beginning for there's a huge room of growth.
The Indian e-commerce retail sales figure reflects the sales of electronics on the rise with 48% of the total figure. Whereas on the other hand, beauty and personal care sales are at 8%, which Gorg sees as a huge opportunity to tap the market.
Though beauty and personal care is very synonymous to females, it's not surprising that the same for men is boosting in India. As of today, the revenue share from men's beauty and personal care is approx. $.83b which is pegged to be at $2.3b in 2023, with a growth rate of 10% YoY.
I interact with competitive beauty and personal care moguls round the clock. However, I found the journey of Gorg's founding team members pretty interesting to take a peek at. I recently bumped into three extremely innovative minds at Gorg - Barun Singh, Dr Davy Jindal and Saurabh Chandra who are playing their parts in transforming the beauty & personal care industry. What caught my attention the most is their being sure about the "how" part of this space in addition to data orientation and detailing.
What is Gorg?
The three founding members of Gorg hail from starkly contrasting fields - a doctor, a finance expert, and lastly, a technology & e-commerce expert. Being a huge fan of Steve Jobs, Jeff Bezos & Mukesh Bansal that they are, their vision is larger than life yet practical.
The utmost energetic Barun Singh talks about today's Gorg offering, "Where can one find authentic and quality beauty products? Tell me one place that boasts of 'genuineness.' That place is Gorg.co.in." Intriguing, isn't it? "It is not a marketplace like many other e-commerce players offer. Rather, it is a brand that communicates with the consumer directly. Gorg is the only place where consumers can engage in pre-buying, buying and post-buying stages. We facilitate them with a multitude of suggestions, recommendations and product application tips by industry experts, who have created these products."
What more? "As to how Apple Inc designed an ecosystem around consumer electronics, we are creating an ecosystem that offers beauty as an experience. And, this will be the world's largest about anything beauty & personal care. I agree it is not easy to create but we have a plan to back our vision. Our mission is to make everyone on the planet look good," elaborates, Saurabh.
The Differentiator - The Team!
Team Gorg considers the biggest differentiator and driving force as the team itself. The reason being they have varied experiences in the team ranging from 8 to 18 years. And, they operate efficiently with a bias for action and data orientation. They are firm believers of the fact what money cannot buy is 'intelligence' and what intelligence demands is to sketch the 'how' part of doing things rather than just 'what'. Though their customer-centricity is high, they don't want to stop there. They wish to ensure a world-class customer experience in their offering too.
Being in the industry for quite some time now, their mantra revolves around obsessive execution with clear KPI's. In other words, they are mature and would help keep investors money in the right channels. Unlike many startup founders, who came to incubate, these 3 were a team of friends much before this idea. These folks term it as unique because the warmth and camaraderie is their strength, which is bigger than any cause. That is what drives Gorg rather the other way round.
The Three Warriors
Dr Davy, high bars, MBBS, served the critical care unit of Max hospital for 8 years before incubating Gorg. A resident of Chandigarh, he had an innate ability to deal with ambiguity and invent & simplify solutions. A positive thinker, an astute executioner, his dive-deep abilities were unmatched, and thinking on the feet was unparalleled. To add to the strengths, he still had the curiosity of the child and could be found on Coursera to learn an entirely new domain and field, if need be.
Left most - Barun Singh , 4th from left - Saurabh Chandra and Right most - Dr. Davy - Founding Members Gorg (in the picture)
Barun Singh, the go-getter, NIT engineer, 9 years experience, Oil and Gas veteran, a resident of Mumbai, is a financial genius. Numbers were his best friend and seemed as if every number was telling some story to him. Always smiling through with dry humour as his speciality. Besides finance, his natural strength is networking and being known as ‘Mr Dependable.’ Owner of multiple research papers, and a columnist with The Economic Times, he was the only one in the class to have made it to Harvard Business School.
Saurabh Chandra, media-shy, BITS graduate, 2 decades of experience with the big brands, especially Flipkart, Myntra and Amazon, is a tech genius. His core strength is incubation & transformation. A core startup guy, author of 2 books, owner of multiple patents and research papers, Saurabh had already been an entrepreneur in the past. His unique superpowers are technology, strategy and business model formulation.
They call themselves as - Mind, Heart and Soul - and they quip - let the world think who is who.
Consumer Offerings, Products And Unit Economics
Gorg has a great aggregation of brands on its platform. Each brand boasts a multitude of products. The brands under their umbrella are Dabur, ITC, HRI, The Beard Story, The Skin Story, WOW Skin Science to name a few. They have some international brands from Germany and Italy such as Fashion Color & B’ Desire that offer some great makeup kits, lipsticks and eyeliners among other beauty essentials. They also boast of multiple Organic, Ayurvedic and hand-made brands such as Prakarta, Body Cafe, GemBlue - A Bio Care, to name a few. It does not stop here, they have an exclusive section for Mom & Baby Care products, which largely deals with natural and organic brands such as Prakarta and Imbue.
The assortment of products varies across skincare, haircare, makeup and personal hygiene. We were enthralled to hear about the numerous offerings for millennials, baby boomers, office goers and working moms.
However, for a business to thrive, it's very important to keep unit economics under check. Where every e-commerce company is bleeding today in terms of profitability, how will Gorg sustain? Barun enlightens us, "Unit economics is the centre of this establishment, unlike many other startups. The team has meticulously planned KPI's, product aggregation and assortment, and brand onboarding. We have kept our platform as a 'zero discount' platform since we truly believe the Indian consumer is looking for a variety with authenticity in the beauty space. He or she understands 'quality' comes with a certain price. Gorg being an exclusive and only vertical in this domain has the potential to offer the same." Gorg operates with a margin of 25% to 40% in both B2C and B2B spaces. However, to reach this margin, the value-added services they provide to their brand community in themselves is a unique feature.
Dr Davy Jindal supports the vision that this section of the company has the potential to branch out as India's largest brand consultancy for the domain of beauty products. The team expresses, "We have branched out 9 different revenue channels in the business including advertisements and 3rd-degree pricing. We come from a traditional finance school of thought that business is done for stakeholders, profitability and returns." They want to ensure they honour the same.
How Is The Startup Helping The Nation To Fight COVID-19?
The COVID-19 pandemic has had a significant impact globally. Gorg faced the impact too. However, this is where experience helps. The company started aggregating products, especially essential commodities. They derived a supply chain model with a hedge, brand partnership and exclusivity clauses for essential products. They enhanced and focused on digital marketing for active consumer reach and platform upgrade to expedite speedy alterations in case of COVID outbreak & lockdown.
On 24th March this year, the Indian Government declared nationwide lockdown, and the complete e-commerce industry came to a halt. But, as Gorg was equipped and prepared beforehand, they were one of the very firsts to resume services across India and continue to do so.
Gorg utilized this time to be innovative, show perseverance, exercise flexibility in running a business and ensure continuity. One very interesting statement that all three founders made, "We were confident about serving the nation now when it matters the most." Gorg is undoubtedly the only platform to not run out on inventory of sanitizers, hand wash and medicated soaps at this hour.
Gorg Business Metrics
When spoken to about business metrics, Dr Davy said, "When almost every start-up fizzled, the stocks of big brands were going down in double digits, Gorg kept upturn with impressive runs." Barun elaborates, "Gorg witnessed an increase in the net growth by 6xtimes and the brand portfolio by 5xtimes. Though we are not a discount shop, we subsidized many essential products by ~50% to 92%." Their way to give back to the society - their delivery partners grew by 3xtimes, number of orders by 32x times, and user sessions by 34xtimes.
Saurabh elaborates, "Though these stats are dream stats for any company today, interestingly what brought a smile on Gorg employees was learning that Gorg products were being shipped to an ailing child in Shimla, a family in need in the remotest place of Manali and Assam, tier 2 cities where the old parents of many IT/Not-IT employees reside (Patna, Lucknow, Andhra, Tamil Nadu etc.), many needy in the largest slum in India, and lastly, old age & child care homes, and NGOs dealing with healthcare.
MIT Bootcamp, Raising Funds - What's The Plan?
Raising funds is inevitable and Gorg is ready to raise funds as well. The team is eyeing a sales revenue of INR 5,849 Crores in FY20-21, with a profitability of INR 877 Crores.
When I asked as to why they waited this long to go for Series A, Barun explains, "We wanted to be doubly sure about delivering ROI to our investors, understand product-market fit, nuances of this business at both good and bad times ( thanks to COVID-19), competitors landscape in the market and ensure that both our customers and sellers ecosystem experience successful working with us."
He further elaborates, "All this we wanted to ensure with our seed money to check if we can sustain the risk and feel excited about solving this problem."
Agreeing with Barun, Dr Davy and Saurabh exclaimed in unison, "Passion drives us and it seems this is a passionate domain where all three of us are enjoying every moment. And, this my dear friend, should be the ideal case to succeed. So, yes, we are ready to raise funds and will be looking forward to partnering with a strategic investor.
All three founders shared with immense pride that Gorg has been accepted in the MIT Bootcamp, one of the world's most coveted startup ecosystems, where only a few around the world could make it. Currently, they are looking forward to networking with relevant connections soon. For early investors, this can be a great investment opportunity as equity price can go manyfold for them ensuring handsome returns. Therefore, unlike many other startups who look at raising funds, Gorg aspires to raise funds now when the team is sure about the growth of investors' money in this demanding market.
To conclude, it is all a game of joining multiple variables and ensuring optimality while applying mathematics, economics, cost & return of capital, investor and customer needs.
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