FMCG majors HUL, P&G, RB and Marico balance between building and buying ‘men’s grooming’ extensions

As Reckitt Benckiser invests in Bombay Shaving Company, we look at the ‘men's grooming’ background of top personal care and hygiene players in India.

Cosmetics have traditionally been manufactured and marketed keeping women in mind. Over the last few years, a bunch of startups in India have been expanding the realm of cosmetics and beauty to include men. These newbie FMCG players have been actively expanding the perimeter of the ‘toiletries and shaving products’ to a much wider ‘men’s grooming’ product segment.

While most men’s grooming startups began with products for nurturing male facial hair, they gradually started addressing needs of the whole body. The segment is also expanding rapidly and seeing a lot of serious interest from larger traditional FMCG giants, those which have a background in personal care and beauty.

Wipro Consumer Care Ventures, the investment arm of Wipro Consumer Care, invested in LetsShave (in November 2019) and Happily Unmarried/Ustraa (in February 2020). The Man Company received two rounds of funding from Emami (in February 2019). Beardo was acquired by Marico (in June 2020). The Bombay Shaving Company, which already had investments from Colgate-Palmolive, received a fresh round of funding (of Rs 45 crore) from Reckitt Benckiser (RB).

While The Man Company, Bombay Shaving Company, Beardo and LetsShave were launched in 2015, Happily Unmarried/Ustraa was launched in 2013.

According to Nielsen, the urban male grooming market India was valued at around Rs 5,000 crore in 2019. The market witnessed steady and healthy growth, with a host of new launches/innovations driven by brands outside the core shaving segments.

In comparison, Euromonitor International’s data suggests that the market size of (female beauty product) lipsticks in India alone reached Rs 3,480 crore in 2018.

An ASSOCHAM report from 2018 pegged the Indian male grooming industry at Rs 16,800 crore, growing at a CAGR of about 45 per cent. According to Research And Markets, the global male grooming products market reached $6,000 crore in 2018 and is expected to reach $8,120 crore by 2024. Counterpoint says that the pace of growth will be reduced due to COVID, but it will eventually recover.

All of these point towards a promising future for the segment and its players. However, existing FMCG giants are balancing between buying and building. While some have laid out plans to build their own brands from the ground up, others decided to shop.

Companies like Hindustan Unilever (HUL), Godrej, ITC and Procter & Gamble (P&G) are yet to take the startup route. Most larger players have had a say in men’s grooming for many years now. Major players in the traditional men’s grooming market include P&G, Palmolive, Nivea, HUL, Emami, Marico, among others.

The space is currently dominated by P&G’s Gillette, and shaving razors command a major share of the category. Razors are followed by deodorants, antiperspirants and other toiletries. Newer product categories include beard and moustache grooming products (like waxes, oils, creams and washes/shampoos).

HUL’s men’s deodorant brand Axe has been around for many years, and has been expanded into categories like body washes. HUL launched Fair & Lovely for Men (Glow & Lovely) in 2006 and later launched Pond’s Men in 2014 (face washes and moisturisers). In June 2018, the company decided to extend its hair gel/cream brand Brylcreem to newer categories like hair wax, shampoo, beard oil, beard wash and beard balm. The new additions were launched exclusively on e-commerce platforms.

Globally, P&G offers an extensive range of men's grooming products (moustache wax, armpit care, hair care, etc.) under the brand Old Spice and its newly launched (in May 2020) King C. Gillette range. The company is yet to launch them in India. Its current men’s grooming portfolio in India, under Gillette and Old Spice, is limited to the usual razors and ‘toiletries’ – shaving cream/gel/foam, aftershave and deodorants.

Godrej Consumer Products (GCPL) decided to expand its soap brand Cinthol to a men’s grooming brand. In September 2018, GCPL launched eight new men’s grooming products under Cinthol, including face wash, shaving cream, beard oil and beard shampoo.

ITC entered the men’s grooming market in July 2011 by expanding its female personal care brand Fiama Di Wills. The company launched Fiama Di Wills Aqua Pulse shower gel and bathing bar exclusively for men in India.

While Palmolive, the shaving cream/foam brand from Colgate-Palmolive, focuses on the hand wash and body wash segments, the company has invested in Bombay Shaving Company along with other investors.

Emami entered men’s grooming back in 2005 with the launch of its men’s fairness cream Fair & Handsome. The company then launched ‘HE’, its line of deodorants for men. Emami has also invested in The Man Company and currently owns 30 per cent stake in the men’s grooming startup.

Wipro Consumer Care didn’t have much of a say in men’s grooming till its investments in LetsShave and Happily Unmarried/Ustraa. The scenario is somewhat similar for hygiene company RB. It is the latest among large FMCG companies to invest in a men’s grooming startup. With its latest investments in Bombay Shaving Company, RB (the owner of Dettol) has joined Colgate-Palmolive. RB’s only men’s grooming product is Veet hair removal creams for men.

Marico has been actively building its men’s grooming presence over the years. Apart from driving Set Wet (hair gel/deodorant) and Parachute Advansed (hair cream), Marico acquired male grooming startup Beardo in July 2020. Over the years, the company has acquired several male-oriented brands globally like Hair Code in Egypt, Code 10 in Malaysia and X-Men in Vietnam. These brands mainly focus on hair gels, deodorants, shampoos, etc.

Dabur marked its entry into the men’s grooming space back in 2013 with the launch of a male facial bleach under the OxyLife brand. However, Dabur hasn’t created too much buzz in the space. Similarly, brands like Park Avenue (Raymond) and Nivea (Beiersdorf) are yet to expand beyond the dimensions of shaving creams/foams and deodorants.

It is understandable that apart from the much needed growth funds, the startups get access to the strengths, credibility and experience of the veteran players. But what do the larger players get out of the deal and why don’t they build their own, instead?

According to Counterpoint, e-commerce is a key sales driver for men’s grooming in India, thanks to the fast lifestyles of millennial and Gen Z men, coupled with the demand for convenience. In the absence of offline distribution muscle and to overcome the challenge of sharing profits with e-commerce platforms, men’s grooming startups have built themselves as D2C online brands. They sell directly to the customers via their own websites. Mainstream players, which largely rely on national offline distribution, are still figuring out the D2C e-commerce aspect.

An industry expert, who has been associated with a prominent men’s grooming startup, says that the bigger companies find it difficult to recreate existing brands. And that, a large company with a top line of Rs 5,000 crore would not want to invest in a business of Rs 50 crore top line within its own portfolio. It might be okay to invest in a small startup and help it grow.

Also, large brands don’t want to experiment with a few crore rupees, and always think from a ‘mass’ perspective. It needs to match the company’s factories and manpower. The expert mentions that today, investments are taking place because the consumers are moving. Say, consumers are on e-commerce, which has made Rs 5-10 crore brands possible. Cinthol can’t launch a small scale product, but Mamaearth or Bombay Shaving can do it. They are used to launching many SKUs on a smaller scale.

While Cinthol’s mens grooming portfolio has only eight products, Bombay Shaving Company offers around 100 products. The scenario is similar with most other startups in the space. They cater to several micro consumer needs. For example, Bombay Shaving Company has 15 products in the beard nurturing line alone. It has several types of shaving foams that address issues like skin sensitivity, etc. Reportedly, Bombay Shaving Company plans to scale its operations to a top line of Rs 150 crore in the next fiscal year.

Another argument is that smaller startups have laser sharp focus on innovation in niche areas, which is actually a challenge for large MNCs. The startups soon gain salience to become brands themselves and match the ethos of the larger company. Also, once acquired, the smaller brands can be scaled up easily. Large companies don’t evolve as fast.