Beauty start-up Purplle aims at turning profitable by October
operational costs. As for south and east, we do not have local warehouses yet, and thus the logistics costs are high.”
Taneja claims logistics costs are a significant portion of the GMV, and as a percentage of GMV they are around 7-8 per cent on an average. When one has local shipment options, then these costs reduce to around 2-3 per cent of GMV.
Purplle.com plans to have warehouses in Bengaluru by September, which will help them turn their southern operations profitable. At present, it has warehouses in Delhi and Mumbai. It has tied up with India Post to deliver pan-India.
Taneja added that their increased focus on automation not only helped them improve profitability and cut costs, but also avoid errors and increase efficiency. This led to less hiring. “Competition with about the same GMV or similar business size and expanse would at least be 350-people strong. We have a headcount of less than 100, including warehouse staff,” Taneja said, adding that they have managed to consume one-sixth capital compared to their competitors to come to the same level.
Purplle.com has also tied up with 6,000 salons across 12 cities and at present 100 customers book appointments daily using it. It plans to take this number up to 500 soon, following which it would monetise the service. Beauty products account for about 95 per cent of the start-up’s revenue.
The beauty segment in India is fragmented and the products segment is estimated to be around ~48,000- 60,000 crore. Taneja feels the online share in beauty is still around 1.5-2 per cent. “Smaller brands would get a larger portion of their sales (around 10-20 per cent) from online platforms. As such the offline space in beauty is growing at 15-20 per cent CAGR,” he added.
Commenting on Purplle.com’s business plans, Gaurav Sachdeva, managing partner of JSW Ventures which has invested an undisclosed sum in the start-up earlier this year, said, “While electronics is the highest volume category in e-commerce, beauty products is the highest margin category. We expect the online space to contribute around 10 per cent of the overall turnover in beauty products over the next five years or so.”