Biju Antony, CEO and Executive Director, Baccarose Perfumes and Beauty Products Private Limited, is now in his second stint with the leading luxury brand distributor in the beauty business. Here, he talks of ‘story-telling’ as the USP of Parcos stores, the upcoming Parcos Luxe format, plans to grow the Chambor brand and how shoppers are keen to buy make-up and fragrances as the world gets going in the aftermath of lockdown.
How challenging was it to take over as CEO of Baccarose Perfumes and Beauty Products Pvt. Ltd in December 2020 at a time of unprecedented market conditions due to the COVID-19 pandemic?
For me, it was indeed special as it was a home-coming, with an absolute mandate from the shareholders to ensure we remain and continue our dominance of the imported beauty business along with familiar partners, brands and the most important resource of an organisation – the Baccarose Team that I had worked with in the past. The familiarity and known processes made it easier for me to streamline and take charge of the operations from Day 1. However, there were apprehensions as market conditions were uncertain with the beauty industry globally hit by the pandemic. Just as markets were starting to recover in the early months of this year, we were hit with the second wave. On the other hand, there is also the opportunity to use a situation to look for new opportunities, new beginnings with the new fiscal. We used this time to rethink our business strategy, to realign, reboot and transform us into a more lean and efficient organization.
What have been the highlights of the company’s performance since then? What do you think are the opportunities in today’s slow market that still has tough competition?
Since April and through June, the market was slow; July onwards things started picking up and this September and October, we did phenomenal business nearly coming back to 2019 levels. Personal grooming came into focus with people spending more time at home with family, and taking care of themselves and also trying out new things. That’s where the world of beauty, make-up and fragrance played a dominant role, along with food and cooking. New categories that didn’t have much potential earlier, grew. With masks becoming an important accessory, eye make-up has become very popular among younger age groups. While our retail stores were shut for two months this year, they have been running smoothly and Parcos airport stores have grown, with travel coming back with a vengeance. As people are keen to move and dress up again, a large part of their shopping has been make-up and fragrances.
How inclined is the customer to buy a high-end perfume or luxury make-up product these days? Give us a comparative on footfalls and online purchase numbers from last year to now.
A customer is always looking at a more evolved product as he/she transcends the economic laddering. Consumption trends have been very encouraging and we see a progressive shift; hence even though people may live in Tier II or Tier III cities, their aspiration to buy luxury has only grown. E-commerce channels have given people across PIN codes access to all kinds of products. While beauty and luxury need touch and feel for brand experience, the evolved consumer is still happy to settle for just the product. During the pandemic, we experienced a drop in business, but by November, 2021, recovered to the same run rate as we saw in 2019. We expect this growth trajectory to see a 20% rise in FY 2022. As for the business verticals, we want to build a robust omni-channel framework in which we would envision a 70:30 split between offline and online. With travel on the rise, as well as some sectors returning to workplaces and weddings back to normal, we see a huge potential in consumers returning to shop for high-end beauty.
Parcos thrives on its partnerships with global license brands such as the Shiseido Group, COTY, L’Oreal, Interparfums, Puig, etc, and has now associated with Indian e-commerce players. What are the latest developments there?
Baccarose has been the leader in the luxury beauty business for over three decades and has established and honoured business partnerships across partner brands and store formats. Since 2017, we have also forayed into the digital e-commerce space. We are available on all leading portals like Myntra, Amazon, Tata Cliq, Nykaa, etc., and are foraying into newer beauty portals as they launch. For a seamless and consistent brand experience, we have created Parcos brand stores to assure the consumer of authenticity and deliver a comprehensive range of brands and ‘Beauty of Luxury’. Now the journey extends to having our own website Parcos.com, offering unique differentiated experiences to our consumers at the click of a button. We are creating multiple connect opportunities with our customers across the country, where servicing via Parcos stores isn’t possible. Since 2019, when the e-commerce contribution was at single digits, we are now seeing a significant share coming from that channel.
What is the USP of the Parcos stores, considering that some of the same international luxury brands also have exclusive retail outlets and are sold online and offline at lifestyle and department stores? What is your growth strategy for Parcos?
We started Parcos to give the Indian consumer the experience that is required for story-telling when experiencing luxury brands. Very few retail formats today offer that to the consumer, as with large format stores, adjacencies and merchandising has limitations. At Parcos, we aim to deliver an omni-channel consumer experience. Apart from providing a holistic shopping experience, Parcos looks at translating brand equity offline to online with the brand-dedicated shop-in-shop (SIS) concept, gifts with purchase and much more. Community engagement through curated content IPs, educational content, social media and more, is the roadmap ahead. Parcos has established its presence across the country, servicing customers across metros, Tier I and Tier II cities. The aim is to open 100 stores by end of 2023.
What is the update on brand Chambor, and what kind of revenue share comes from it?
From the start, Baccarose brought the expertise and sophistication of its European brand portfolio to Chambor. Historically, the brand combined that chic, quality and service with its knowledge of Indian women to propose a unique ethos and line. The brand is now poised for growth, keeping pace with women’s evolving lifestyles, perspectives and shopping preferences. Chambor is innovating on formulas, extending shade ranges and ramping up its style to breathe new life into high-performance, trendy lines and collections. By re-inventing the brand, we look to gain significant market share in the colour cosmetic space.
How do you envisage the next level of business growth in India for Baccarose overall? Going forward, what will be your top three focus areas and investment strategy across operations?
We have strategically defined the growth strategy over the next few years with distinct levers of growth for Baccarose: Parcos to expand to 100 stores by the end of 2023 and Parcos SIS within other formats as well as exploring franchise associations to expand the chain. Creating a robust digital ecosystem to propagate and deliver seamless and efficient service via Parcos.com. Aggressively building our own brand Chambor to spearhead the masstige (premium but attainable) segment in the colour category and re-establish dominance. We are also developing licensee brands and launching more owned brands and evaluating market spaces where our presence can be established with strategic launches.
Talking of the industry, what trends do you see with regard to distribution in the beauty business? How do you assess the future of the beauty and fragrance business in India in 2022?
The current distribution of luxury beauty products is experiencing a shift from being predominantly available across department and lifestyle stores to being digital with a part of audiences shifting to online buying for convenience. Luxury brands will still seek formats like Parcos or stand-alone stores in order not to dilute brand equity. For luxury skin and colour, India does not have too many formats that can house brands in their full glory. We are developing a new Parcos Luxe format that will give these brands the retail ambience their customers need.
Tier II and Tier III markets have shown a distinct traction for prestige beauty products and with growing demand, brands would need to be online to be able to deliver and therefore expand market presence via online presence. The omni-channel experience is core and now the consumer wants the flexibility to experience brands in the store and have the liberty to buy online. Growing consumption from across consumer strata will help expand the pie and fuel growth for the luxury beauty business. The aspirational middle class is now spending on lifestyle and luxury as some of the prevalent modes of entertainment for them have been muted on account of COVID. There is also an increased self-awareness thanks to content created by influencers, who are now driving purchase decisions, impulsive purchase and trial of several newer categories unheard of in the past.
What have been your big learnings over the three decades you spent working across Health & Beauty, FMCG, Retail, Luxury Fragrances and Cosmetics companies?
There is a considerable shift in the distribution formats for the luxury beauty industry. From beauty assistants driving advocacy, now it’s the beauty influencers who are fuelling demand and driving purchase decisions and trials via social media. Consumers have evolved with international exposure and influx of content across various digital screens. While luxury is still niche, there is an increasing aspirational demand generated from the Tier II and Tier III markets over the last five years. Consumers are now a more evolved set with distinct tastes and self-expression is key, which has given additional traction to fashion and beauty categories. My biggest learning over these decades has been that India is an execution market and not a strategy market, and having the right partner in India is critical for any luxury beauty brand to succeed here. The biggest have failed or have limited presence as a result of going on their own, or not having the right partner in India.
