From bankruptcy to bouncing back: here's how Wow founders built a Rs 350 Cr business
Only four years ago, Arvind Sokke and Ashwin Sokke, Manish Chowdhary, and Karan Chowdhary started off with a dream of making it big in the skincare and lifestyle industry by investing very little money. Fast forward to 2019 and you have them becoming the global darlings of Amazon; their company Fit&Glow is a $50 million (Rs 350 crore) business and its brand, Wow, is a national and global hit.
The company managed to build a business purely via ecommerce with a small offline presence. Amazon India's Head Amit Agarwal has gone on the record to say that Wow is a hit among all their sellers.
But like all great success stories, Wow’s too started small with heaps of challenges along the way. The journey had begun with these friends almost going bankrupt. Their retail business in the laptops and electronics space piled up a loss of $1 million due to unsold inventory and the rise of deep discounts by ecommerce businesses in 2012.
But the obstacle became the way when the founders turned their misfortune on its head and decided to embrace ecommerce. The rest, as they say, is history.
(l-r) Arvind, Ashwin, Karan, Manish
The friends wanted to create a niche in a new segment. So they decided to focus on the health and beauty sector. They used their combined savings, focussed on quality of the products, and kept its team very lean. They invested on a consumer-first strategy.
"Over the last two years our business has grown by leaps and bounds. We have seen a steady growth in terms of our revenue and our range of products. It has been really satisfying to see our hard work bearing fruits. During this time, we have done two major things," says Manish, Co-founder of Fit&Glow.
New products, fast growth
The founders wanted the Wow brand to become synonymous with new, innovative formulations and spent a lot of time understanding consumer needs, building systems, and processes to garner data and take inputs from the insights generated by that data.
One of the reasons the company has seen so much traction in India is that the products are available at an affordable price point. In the US, their products found wide acceptance because of nature-powered formulations.
"In the West, there is an increasing consciousness about using sustainable, nature-based products, and Wow Skin Science delivered that. The last quarter has been really good for us as we achieved landmark growth in our business. We have 100-plus product variants with innovative and effective formulations," says Manish, adding that the brand has grown the company and does not use any parabens, sulphates, colour, mineral oil, and harmful chemicals in its formulations.
Wow’s apple cider vinegar shampoo is the highest selling product on Amazon in India and in the US.
Online demand has propelled Wow’s sales to $1 million per month. This changed the whole game for the company in 2016.
Riding on the success of apple cider vinegar shampoo, the brand developed a whole apple cider range for skin and wellness as well. Today they have a drink, face wash, and hair mask all based on apple cider vinegar.
"We have also seen lots of success with WowSkin Science Onion Black Seed Oil – it is the number one selling hair oil in all the online marketplaces for us. Similarly, WowSkin Science Aloe Vera Gel has huge demand and acceptance among our consumers. We are also enhancing the product usage experience by introducing innovative packaging like our face washes with built-in brushes," says Manish.
Going offline, and R&D efforts
The Indian offline story is still intact for the next 10 years or so, but the founders of Wow feel digital will catch up sooner than later.
Since they are a bootstrapped startup, funneling their personal savings into the business, the online space was faster and connected better to their strategy.
But the brand has also expanded its offline presence in modern outlets, and specialty beauty and wellness stores, supermarkets, and pharmacies across the country. It is presently available in 1,600 stores across the country.
Being a D2C (direct to consumer) brand, the founders say they have an extensive in-house product research and certification process. They check on the latest skincare, haircare, and wellness trends across the world, look out for new natural ingredients, and also take inspiration from age-old Ayurvedic recipes.
"Based on the research we develop formulations that are tested and sent out for safety and efficacy certification. Once we get a certification on our formulation, we go into production. We use external expert agencies for this," says Manish.
He adds that all manufacturing happens in their state-of-the-art facilities in the foothills of the Himalayas.
According to Deloitte, consumers are driving India’s retail growth. Consumers have increasing budgets for discretionary spend and added to that is the digital ubiquity leading to a stronger ecommerce market.
This poses a great opportunity for digital-first marketers to reach out to more buyers. In fact, they have successfully built their business not just pan-India but also across the sea based on the digital medium alone.
"We call ourselves a semi-tech business. In 2016, when we wanted to become a health and beauty brand many did not believe in our story. Beauty business in those days was highly dependent on influencers like in-store beauty assistants or advisors. They often pushed consumers to make the final buying decision," says Manish.
However, digital medium has broken all barriers, he feels. Consumers know so much more about what is good and bad for them courtesy social media. "It is easier to connect with the digital and social media-savvy youth of today. Real user stories and experiences can be shared, which helps one to push further into the market," he adds.
One major change the founders notice is that around five years ago it was the seniors in the family who decided on the beauty and wellness products to buy, but that trend has shifted drastically. Now, young India and the millennials are deciding what is good for the family, which also increases the ticket size or value of the product they are buying.
"The new consumer today is also more aware and wants products that are in tune with international trends. They are also more eco-aware, which means nature-based, sustainable brands get more acceptance. That is where we are also focusing on," says Co-founder Karan.
Fit&Glow competes with all FMCG majors like ITC and HUL, which are billion-dollar businesses.
Digital the only way forward
Going digital has meant that Wow has been able to reach out to customers in smaller cities and towns without any offline presence there.
Today, the products are available on ecommerce portals like Amazon, Flipkart, Nykaa, Myntra, and Bigbasket.
The founders note that they use data analytics in a big way to understand consumer behaviour and design their way forward. They track social media behaviour and level of awareness among their target audiences and create products around insights.
"That is why it is important for them to leverage social media. And we have done that. We use the power of YouTube, Facebook, and Instagram to promote the brand’s nature-based, science-backed range of products. The strategy is to spread awareness through product videos. We took this path because we wanted our customers to know our brand’s USP and the unique formulations before they made a buying decision," says Karan.
Today, Fit&Glow is a $50 million business in a very short time and with a modest initial investment.
"I believe common sense should be the priority when running a business. Yes, being bootstrapped does get you disciplined about not burning cash and using your capital wisely to fuel all your profits into growth and infrastructure," Manish adds.
(Edited by Evelyn Ratnakumar)