How Archies ventured into online beauty and personal care with gift sets from Mamaearth, Beardo, Skinn by Titan, The Man Company, etc

For every special occasion, a trip to a nearby Archies retail store was a must.

On the days preceding Raksha Bandhan, Christmas, or other festive occasions in India, Archies stores were usually filled with excited shoppers buying greeting cards and gifts for their near and dear ones.

But in the last year, the cheer has disappeared from the retail stores with their iconic red-and-white banners. They have remained largely empty, or shut.

Like it did for most businesses, the COVID-19 pandemic and ensuing lockdowns hit Archies hard. In FY21, the New Delhi-headquartered brand’s net sales turnover dropped to Rs 55.29 crore from Rs 139.32 crore in the previous year - a 60.31 percent decline.

Confident the difficult times will pass, the NSE and BSE-listed firm recently forayed into the beauty segment by launching a new website - where it sells gift packs by 45+ skincare, haircare, cosmetic and fragrance brands such as Skinn by Titan, Mamaearth, Beardo, The Man Company and Ajmal Perfumes.

Hanisha Kapoor, COO, Archies Beauty, says:

“During the pandemic, the online beauty, personal care, and skincare industries boomed. Since Archies already has a strong presence in the gifting industry, we decided to add these products to our online portfolio. We collaborate closely with national and international brands to craft exclusive gift sets and hampers for our customers.”

The new website for beauty products is separate from Archies’ larger ecommerce website for its regular gifting products, she says, adding that the Android and iOS app are expected by the end of the year.

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Online is the way to go

In recent times, as with the beauty products vertical, Archies has been focusing on retailing gifts with a utility value. Personal care products, sweets and chocolates, artificial jewellery etc are a crucial part of its portfolio.

“A photo frame or a mug that people may not use does not create much of an impact anymore. Beauty products, however, are useful for everyone. We are also promoting Indian brands and startups, and leveraging our existing logistics infrastructure to deliver these products to customers,” Hanisha says.

The success of Myntra and Nykaa (besides Amazon and Flipkart), which retail similar products, has shown Archies that online gifting of beauty products is indeed the way to go.

But one key difference that sets Archies apart, according to Hanisha, is its robust mechanism for personalisation.

Not only can customers purchase gift sets curated exclusively for Archies, but they can also choose to gift wrap the presents and send greeting cards along with them.

“The retail experience is largely similar to the other ecommerce players, and while Archies Beauty is still new and not competing with them directly at the moment, we still recognise that competition is everywhere. It’s not just the online players - any consumer brand in any segment has products that can be gifted,” she says.

A competitive market

The road ahead is far from easy for the iconic gifting retailer. Started in 1979 in New Delhi by Anil Moolchandani, the brand remained synonymous with greeting cards and gifting for over 30 years.

It is now preparing to deep dive into a highly competitive market for online personal care and beauty products.

Hanisha believes to succeed in this market, Archies has to play with low margins and discounts to attract more online customers. Simultaneously, it has to spend on innovation to set itself apart from the pack. “Other online players are already giants, and to compete, we need to become trendsetters,” she says.

To this end, Hanisha is looking to onboard and curate gift sets from over 250 personal care brands by the end of next year, and get exclusive distribution rights for international entrants in the Indian market.

“We’re working with various agencies to promote our products on social media, and also engaging in influencer marketing to reach almost 12 million people in the next few months,” she adds.

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Market scenario and importance of offline retail

Archies is now playing in an Indian beauty and personal care market that will be worth $28 billion in 2025, out of which the online segment will grow at a CAGR of 29 percent to reach $4.4 billion by 2025, according to a report by Avendus.

While Archies is optimistic about its online beauty venture, it is equally confident its physical stores will continue to play an important role in its future. 

With the proliferation of the internet and adoption of online retail, Archies added electronic greeting cards and an ecommerce shopping experience to its offerings, but did not scale down its offline retail presence before the pandemic.

It marginally reduced its physical presence from 250+ stores to 225 on account of the COVID-19 impact, but still maintains a robust network of gift stores in over 120 cities across India and other countries.

“Our stores are not going anywhere. Wishing people on social media is more common, so sending a personalised greeting card is all the more special. Our physical stores remained popular even after we started our larger ecommerce play. Now, the pandemic has accelerated our online sales, but we always maintain that ecommerce is an add-on to our brick-and-mortar retail model,” Hanisha says.

She believes getting Archies back to its pre-COVID revenue numbers is now a waiting game.

“Our manufacturing unit for greeting cards, paper bags etc in Manesar is back to full capacity now. But we are still waiting to see if we face a third wave of COVID-19, in which case we can still serve our customers through our ecommerce model and keep Archies running,” she says.