Purplle.com: A Beautiful Partnership in Beauty Products and Services

Today, we meet Manish Taneja and Rahul Dash, co-founders of Purplle.com. Purplle.com is a young and exuberant company, started two years ago, focussed on the personal care and grooming space in India. For the last two years they have been building a fantastic marketplace for beauty products and as well as services. Let’s find out more about their partnership, how they did it, their success mantras and the way ahead.

Tell us how this venture started.

Manish: Part of it is serendipity; Rahul and I used to be flatmates. In 2010-11 I used to work at Fidelity in South Mumbai and he worked at Tata Sons. When we were at home we would discuss a lot of business ideas since I was evaluating things in e-commerce and trying to invest in them. At the same he was looking at starting an e-commerce venture in furniture. This is how I was able to convince him to join hands and start Purplle. This was around the middle of 2011; we prepared for 6 months and in January 2012 we launched Purplle.

So far how has the journey been?

Manish:  Two or three key learnings: First is try to get sales as soon as possible. It gives momentum to a company. It took a really long time to get our first sale. Honestly, the amount of transactions that take place in a second now, is what used to happen in a month in the first quarter of 2012. The second learning was similar. There are two parts to Purplle: one is our products marketplace where we help customers discover the best beauty and grooming products and the second part of our business is a hyper-local salon, service and beauty marketplace where we help customers discover the best beauty services. We started with the product marketplace business in 2012 and the services marketplace business in mid-2013. It was déjà vu wherein people did not want to partner with us, so again it was important to get the first sales done quickly. The journey has been very enriching and we never thought we would come this far. We are grateful to people who believed in us. Especially to those with whom we have worked in the past. Getting ourselves seed funded was slightly easier as compared to most. The third most important lesson is that entrepreneurship teaches you how to manage cash flow really well. So we have gone through tough times but we have come out of it in good shape.

What is your opinion on the potential of this market in terms of size and volume?

Manish: Beauty is a very interesting market as it is very elastic. There are products available at a price point of Rs 50 while the same kind of product is available at Rs 50,000. In terms of size it is about $6 billion in India and growing about 15-16% Y-O-Y. We are expected to double in five years so we are expecting it to be around $12 billion by 2020. The beauty services market which includes salons, spas, skin clinics and hair clinics are another $3 to $3.5 billion so we are targeting a $9-9.5 billion market. Right now less than 1% of this market is online. There are thousands of products available and offline retailers find it extremely difficult to keep all the products in one place. Therefore online players offer an advantage in terms of showcasing 30-40 thousand different kinds of products under one roof. Right now in India, online sales contribute to less than one percent of this category whereas in China it is 15%. We hope that in India this number will touch 15% by 2020.

Keeping this in mind what sort of goals have you set for yourself?

Manish: We are still a fairly small company and we don’t plan very far ahead. I will give you some metrics in terms of where we are and where we plan to go in the next 12 months. Overall we do thousands of transactions a day, we have around 12,500 products live on the site and we have about 7000 salons and spas listed, mostly in Mumbai as that’s a hyper-local business and we started in Mumbai. Our plans for December 2015 are that we want 25,000 products to be listed on our site and we want 50,000 spas and salons across 30 cities in India. That is the broader plan. We hope to grow 8 to 10 times this year.

What is the competition and how does the landscape look?

Manish: We compete with four kinds of people, the largest being the offline retailers. 99% percent of the market is offline as people either buy from the traditional retail store or the modern trade store. The second is from the horizontal e-commerce players like Flipkart, Amazon, Jabong, Myntra, who also have this category. I think the third category, and very few people have survived, are vertical niche players like Nykaa. On the services side honestly, there aren’t too many players who are of scale except Justdial, but beyond that the services landscape is fairy open and if you can provide high quality content I think you will be a winner here.

What are the milestones that this venture has passed so far and key achievements that you guys would like to highlight?

Rahul: The first milestone was to get a certain number of brands online. We launched 350, based on the pre-work that we had done. We typically measure our business in terms of number of transactions since it is a transactional business. We have reached thousand transactions a day, that’s where we are and that’s another milestone. We sell products every two minutes approximately and we want to take it up to every two seconds and that’s the kind of growth we are looking at. We started off in Bombay with salons and spas with close to 100-150 salons at the beginning and today we are in 6 cities and close to 7000 salons and spas. Financially, we will close the year with $10 million, so that’s where we are.

Comment on the strength of the organization.

Manish: We have a strength of 50 people, half in office and half in a warehouse we run as a processing centre in Bhiwandi. Another milestone I would like to speak about and on which we focussed from 2012 onwards is that we wanted to build a community of beauty enthusiasts and these people have really contributed to our success and to give us perspective when we began. We believed reviews and questions and answers will be very important and therefore we incentivised our buyers to contribute by writing reviews or asking questions about these products which our team would be answering. At the start we had very few people but today we have 50,000 reviews on our site and a community of 5000 people who regularly contribute and I think this is a milestone. We want to grow ten times this year in this aspect because we will take this community social and we will reward the community financially.   

What are the key customer trends you are seeing in this arena of shopping?

Rahul: India in itself is like many countries compressed in this small geography. What we realised is that these varied kinds of interests and these varied kinds of profiles in our segment of beauty cannot be fulfilled by only certain products or services. It’s not the case that we have seen buying behaviour with only 5% of the catalogue being purchased online; it has increased to 40%, which is a significant hike. This happened because we started to suggest products depending upon the profile. We told you which products someone with a similar profile as yours is buying and that profile was created across certain data points. We think that this is the biggest strength in the market and hence the biggest opportunity. I would put all the key trends in the bucket of discovery of products and services.

Do you see different trends in discovering services versus discovering products?

Rahul: The key differentiation is localization of services. There is a little overlap over there as the products being launched now have a significant amount of salonization; the brands come to you and tell you that you can use products that you get in a salon. On the salon side, people are standardizing things, they are putting a brand name to the process, they are putting a brand name to the stylist experience. Such as if the stylist is a senior stylist then this is the kind of salon service you will get and if the stylist is junior then this is the kind of service you will get. It’s getting more process and brand oriented.

Manish: What I would like to point out is premium-isation. India is graduating from basic products to premium products. Also as a platform focused on beauty our job is to help customers discover the best place or products to take care of their problems. That is something that hasn’t changed, people really want solutions to their problems.

If you take the next 12-24 months, what will be some key initiatives in either of these segments?

Manish: I think it will be ‘mobile’. For the first time in India, I think we have a medium which can help connect to the masses and would make a lot of sense to launch in vernacular languages. On the product side, we have rolled out a very cool initiative which is sampling. We allow people to choose the samples they want to try and ensure samples go out to the right people. We are hopeful that this may lead to very high conversions. The second thing we will launch is a subscription. We have observed repeat purchase patterns and we believe that if we offer them a seamless solution it will be key.

On the salon side, the key feature we have launched and are rolling it on 10,000 salons in India is bookings. We used to be a listing platform till the end of 2014, akin to Zomato for salons and spas and now as we have started rolling out bookings, it’s a great value proposition for a salon and spa. The way it works is, if the salon gets a customer from us and they spend say Rs. 1000, they give us x% revenue share. We have already cracked 500 in the first month. Almost every large chain salon is taking bookings through us and we aim to ramp it up to 30 cities in India.

What are some key challenges in sourcing products in terms of merchandising?

Rahul: Considering the huge number of categories it becomes difficult to match the preferences of each consumer.  To match up to expectations I collect data, I look at earlier behaviour, I look at seasonal trends, I look at what is going on in mass media; so we are aligning with brands and their marketing plans to know if a TVC is playing and what is the expected growth in terms of volume for a product. We feed that data into our inventory management system, which shapes our merchandising. Beyond that I curate a profile. I take your profile and analyse what you are doing on Twitter, Facebook, purplle.com and other relevant sources and then show only relevant products to you.

Manish: Part of it is matching the customer profiles and calibrating how much of which SKU is to be kept in inventory. And that is critical; we use a lot of predictive modelling to do that. We are improving our algorithms to figure out how much to keep in our inventory so we don’t put pressure on our working capital and also don’t annoy our customers that this product is out of stock. We are taking extreme care in making it working-capital efficient as well ensuring customer delight.

What are the areas where you are looking for partners?

Manish: I think there are three key areas where we are looking for partners: First is mobile, we are looking to partner with a company which has a high mobile base, to get application download engagement within the app. Second, we would like to work closely with companies which offer vernacularization of content. The third and very important one would be on brands that are exclusive in India and offering them a platform. On the salon side we would like to partner with salons in Tier 2 cities of India. Broadly those are the kind of partners we are looking at.

Rahul: There are a lot of products which are not available in India and there are consumers for such products. You would see people ordering from Singapore websites or even ordering from Amazon.com from the US. We would like to plug that gap, we would like to speak to people who are getting these products into India, getting into a strategic partnership where we can get Middle East into India, South Korea into India, get Europe into India. So that’s another partnership just to ensure we can get all the data for our consumers.

When you look at the digital marketing efforts you are making, what are some key efforts?

Manish: We use the usual channels of traffic: organic search, paid search, social, affiliates and direct. These are broadly the important channels. The challenge and benefit of digital marketing is that it helps you start and helps scale up to a certain level without huge budgets. Over a period of time one realises that it becomes incredibly difficult to get new customers while keeping your cost per transaction under control and that is the time one has to think of growth hacks or of growing offline in terms of advertising strategy. Right now we are at a place where we are considering implementing a lot of growth hacks which will take us to the next level. We are also trying to do some offline media investment to build a brand but again we are really figuring out right now how to measure the success of our offline media campaigns. Unless we are able to figure it out I don’t think we would be spending money on online or offline media.

When you compare yourself with peers in the industry, which channels seems to have the highest dividend or best ROI?

Manish: Affiliate traffic is the cheapest, after that comes search. Social is the last at least for us because in our category brands are fairly strong, people know what they want to buy, what they are searching for and therefore for us to redirect them a relevant page is much easier than maybe in apparel.

Rahul: Matching the exact profile of the consumer with the exact profile of products and services is going to play a key role in the future. With the same amount of traffic there is very high possibility of us doing five times the number of transactions. We don’t need more traffic, we just need to tell the consumer that you have come to the right place, this is right product, this is the right service; come and book, we will deliver it.

Tell us little bit more about the app you were talking about?

Manish: We are targeting the launch of our app by 26th of January. It is going to be very different from our website as we believe mobile is the best device for discovery; it is very engaging, it is next to you and therefore our app is focused on discovery where we tell you interesting things you have not heard of, where we tell you of interesting products or interesting things to do with those products by combining products.

There are three parts to the app: Discover, Create and Shop. Discover and Create take precedence over Shop. In Discover, we help you discover the right product and right services. In Create, we help you create high quality visual content.

What have been the big lessons in this journey so far?

Rahul: People need to understand when they get into entrepreneurship that it’s a lifestyle choice. If you don’t make peace with that life it will always pull you down. You cannot shout at people just because you have stress or issues in funding, warehouse issues and whatnot. Early in our careers we were used to having a manager over us, thinking, ‘if I don’t do some work, someone else will’ and ‘my manager is responsible’. Now, it’s all me. So it’s up to me to make the right decision, make the proper choice. The biggest issue I have faced is not making a choice, which is worse than making the wrong choice. So it’s an advantage that even before we turn 30, we are getting to understand what matters and what doesn’t matter. That’s what entrepreneurship has taught us.

Manish: I don’t get to properly sleep at night because I have so many ideas brewing up in my mind. It happened even last night, I think I slept at 4, because from 12 to 4 I was thinking about lots of things I wanted to do this year.

Entrepreneurship takes lots of patience and perseverance. So if you think you don’t have it, don’t jump into it.

It’s like a sine curve; it has lots of ups and downs. So just make sure you’re prepared for that. Secondly, nothing happens till sales happen. So whatever matrix you’re measuring for success in the early, middle or later days, just make sure your company is growing on that matrix. It could be engagement on sites like Facebook, seeing how many people created accounts, number of friends being added, people posting content, etc. For certain companies like us, it could be both; engagement as well transactions.

Last but not the least, one of my very important learnings has been: be open to conversations with strangers, you never know what would come out of it. Enter any meeting with a lot of positive faith that something miraculous is going to happen. It has happened to me innumerable times with many people and they have been very good to me. We have found great mentors in people we didn’t know three years ago and I think it continuously surprises us when we meet new people.

If I can summarize it: make truce with this life; your friends will live a very different life than you. Just be aware of it, no harm in it and not everybody runs the same race. Measure your matrix and ensure you’re growing on those matrices. Nothing happens till sales happen. And finally patience and perseverance. Money doesn’t drive startups, growth does. Money can solve only one problem, which is money. Everything else has to be solved by teams.

What brought you guys together and how do you continue to venture together?

Rahul: We are very different people but there is no disconnect in our view or our goals; which is very important. Respect is another thing which is extremely important. You should always have faith in your partner and trust is important that way. If I ever open a start-up again, I will never do it alone. It’s important to have a co-founder. This is what I think of our dynamics.

Manish: We have very complementary qualities and we never spend time on a single problem for long. That helps the company grow faster. We have very different relationships. That has helped the company do better than it would have had we come from very similar backgrounds. Not that we don’t fight but I think that sense of respect for each other has taken precedence over everything else.

It has been fairly easy taking decisions except in some cases where we haven’t taken decisions and it has hurt us. Across the top team of Purplle, we are very happy and privileged to have so many people who have worked with us right from the start and are still there with us. We never believed we would come this far and were always amazed at what we have achieved and I hope we continue to amaze ourselves over the next 5 years.

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