Darpan Sanghvi: The Makeover Man
When Sanghvi started MyGlamm in October 2017, he was sure of scaling his brand's own website, but that would cost a lot. That is when he came up with the 'content to commerce' strategy
Good Glamm Group has carved a niche for itself in the crowded direct-to-consumer (D2C) market. By leveraging 3Cs – content, commerce and creator – it has become India's first digital FMCG conglomerate.
In November 2021, Good Glamm Group added another feather to its cap by becoming India's first beauty commerce startup to turn a unicorn after it raised $150 million in a Series D funding round led by Prosus Ventures (Naspers) and Warburg Pincus.
In a conversation with Entrepreneur India, Darpan Sanghvi, group founder and CEO, Good Glamm Group shares his journey from then on and talks about the latest developments in the beauty and personal care space, its future in India, his business moat and future plans.
The next wave in content to commerce
According to a KPMG report, there are over 800 successful D2C brands in India today, with a sector valuation of $44.6 billion (as of 2021). Talking about how the space has become massive, Sanghvi said, "About five years ago, people started believing that brands can be created digitally. That's how D2C revolution really started, with young brands that are closely connected with the customer starting to come about."
"As you start doing D2C brands you have two options, either sell on your own website, or on marketplace or both. What brands are realizing very quickly is that if I want to sell on my own website, it's very expensive to get traffic onto my website. That seemed a more inexpensive proposition. On your own website, you don't pay commissions and the margin is high, but you then have cost of getting people there," he added
When Sanghvi started MyGlamm in October 2017, he was clear that he wanted transactions on the brand's own website, because then the brand owns the customer. But that would cost a lot. That is when he thought of the content to commerce strategy. "I thought that I can leverage content to reach out to consumers organically. And then through that education, bring them to my platform organically, and reduce the amount of money I spend," he said.
D2C brands are looking for cost-effective ways to engage with consumers. Sanghvi says that is where Good Glamm Group stands out. "We created a content and a creator engine, which allowed us to get traffic on our websites. Today, if you see our business, about 85 per cent of our online revenue comes from our own website, which nobody else has.
Leveraging the power of influencers
According to GroupM INCA's India Influencer Marketing Report, the Indian influencer economy has expanded to an INR 900-crore business and by 2025, it is expected to grow to INR 2,200 crore at a CAGR of 25 per cent.
Darpan believes that the new wave of how consumers discover and interact with trends and products is not just going to be with content produced from studios, but will be more of user-generated content (UGC) from creators or creator-generated content as he calls it.
"So that's the big bet that we took then in October of last year when we said we are going to create Good Creator Co where we bought five of the top creator companies of India, put them together in one platform to have creators," he said.
Why restructuring was important
Last month, the company announced a structure that consolidated Good Glamm Group companies into independent brands, media and creator divisions along with the international business division to maximize revenue potential for all beauty and personal care brands in the group. This consolidation aims to unlock structural efficiencies within each division while also driving cross-division revenue synergies, which will allow each division to be independently profitable.
"We have acquired 11 companies in the last 12 months. Most of them are beauty and personal care brands. Three of them are content, and four of them are influencers. Now we've restructured the group into three divisions. The beauty personal care brands come under Good Brands Co, Good Creator Co is the influencer piece, basically a one-stop shop for every influencer to come and make money, learn new skills and become famous. Then we have Good Media Co, which essentially is the one that gets the 4 billion monthly impressions on social media and acts as the distribution channel for content that are being created, and the brands go into the creator content. And monetization happens when the brands make sale on their own website," he said.
However, each division runs independently and has its own P&L. Each division has the mandate to be profitable on its own. Among these, the creator division is the largest and will continue to remain the largest influencer platform in India, he says.
Diversifying beauty vertical
Sanghvi believes that if you want to build a large business at scale, you have to scale across different categories of beauty and personal care, and across every major channel where it is sold. "So if you see our acquisition strategy, it has been just to fill that be it makeup, skincare, haircare, baby care or feminine hygiene," he said.
The beauty unicorn wants to get into men's grooming and sexual wellness as well. However, it claims that it is not a Thrasio-style company. "We don't buy anything that is out of beauty and personal care. So we're not buying fashion or anything. I'm focused on beauty and personal care. Will our digital FMCG conglomerate get creative? I absolutely believe so. We are the only ones with such a high digital reach. And we are the only ones with a complete portfolio D2C brands. However, I'm not looking to buy 50 companies. I maybe have three more roles to fill, that is men's grooming, sexual wellness, hair colour and I'm done. So, we don't think of us as a Thrasio-style model at all," he said.