Over the years, Archies Ltd reduced its dependence on greeting cards, diversifying into categories such as costume jewellery, chocolates, mugs, soft toys and grooming products
NEW DELHI: Having witnessed a speedy adoption of online shopping in India, reeting cards and gifting firm Archies Ltd has launched a dedicated beauty category site Archiesbeauty.com.
The company has partnered with 45 homegrown and international skincare, haircare, cosmetic and fragrance brands for the website. Some of the brands listed on the site include Skinn by Titan, Mamaearth, Beardo, The Man Company and Ajmal Perfumes, among others. The company plans to bring 100 more such brands in the next quarter and take this figure to 500 in a year’s time. These products will be priced between ₹999 and ₹1,499.
"We are currently looking at the mass-market but may have some premium products in a limited way," said Hanisha Kapoor, chief operating officer, Archies Beauty.
“Beauty is the one of fastest growing consumer product sector in India growing from $7 billion in 2014 to $10 billion in 2021. There has also been a major shift in usage of beauty products from special occasion to everyday use. Therefore, we decided to venture into the category," she said.
Archies Beauty, however, will only retail combo packs as gifting options. “Our target is to make Archies Beauty a one-stop destination where customers can buy beauty related gifting sets and combo that are priced attractively. Some of our partner brands don’t offer gift sets but have agreed to do it exclusively for us," Kapoor said.
Archies Beauty is being launched two decades after the gifting retailer decided to set up its e-commerce platform in the country. Set up in 1979 by Anil Moolchandani, Delhi-based Archies Ltd was in a league of its own and its chain of offline stores were synonymous with greeting cards and popular for special occasion gifting. While digital and social media platforms have practically wiped the personal card messaging market, the company has managed to stay afloat and continues to run physical stores.
"...although we launched our e-commerce website in 2001, we never invested much in it because at that time digitisation had just started. However, with social media and e-commerce taking over, we are also moving in the same direction. We will try to be innovative and offer something unique to consumers. We see ourselves in top five aggregators of beauty industry two to three years down the line," said Kapoor.
Beauty and personal care (BPC) is a $14 billion-$15 billion market in India, and likely to grow at 8% CAGR over the next five years, according to a Jefferies report citing Euromonitor data. E-commerce accounts for 5-6% of the category or $800 million in revenues, with Nykaa accounting for 30% of the online BPC market.
In offline retail, too, the competition has been stiff with firms such as Japanese low-cost retailer Miniso and Korean lifestyle brand XIMI Vogue making inroads and taking up a share of the market.
Over the years, Archies Ltd reduced its dependence on greeting cards, diversifying into categories such as costume jewellery, chocolates, mugs, soft toys and grooming products. Currently, e-commerce contributes barely 5-10% to its business with majority of the revenue still coming from retail stores which have scaled down from 250 to 225 due to the impact of pandemic.
"To make our company future proof, we are entering into new ventures. We are also adding multiple new things to our retail stores so that we continue to retain the excitement for our customers," said Kapoor.
Products such as Saregama Caravan, Titan perfumes and chocolates have been among the bestsellers in Archies' stores.
Kapoor claims that Archies has an edge in terms of better cultural connect and nostalgia attached with the brand that might work in its favour. “People relate to us more than they do with foreign brands as they have generic products. We have a monopoly when it comes to occasion-based gifting products. Valentine’s Day, Mother’s Day and Raksha Bandhan continue to be quite big for us. We are also trying to revamp the greeting card category. In the age of Facebook and Instagram messaging, a physical greeting card has become a special way to wish someone," Kapoor added.
Ankur Bisen, senior vice-president, retail and consumer, Technopak, a management consultancy, said Archies Ltd, as a company, needs to reorient to the new world order. It needs to understand how their key segment (pre-teens and teens and early twenties) evolved and what do they seek when it comes to gifting. Beauty becomes a natural extension for Archies because their offline stores are largely located in areas where customers would come in to buy beauty related gifting products.
"They know this category is growing both online and offline looking at the growth of players like Nykaa and Dabur’s NewU beauty retail stores. This category, both from company’s need perspective to change and demand side, makes a lot of sense. However, it has become crowded and expensive to attract consumers, especially, online. Their big challenge will be to stand out on digital where customer attention span is so less, I’m sure the company must have thought about it," he added.
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