Tata CLiQ Beauty Expansion Strategy and Market Analysis
Explore how Tata CLiQ is entering the beauty category through in-depth research, competitor analysis, and segmentation to target ideal customers in India. Learn about emerging trends, customer preferences, and the business model canvas adopted by Tata CLiQ for a successful entry into the beauty market.
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Presentation Transcript
TATA CLiQ By: Wasim Rahman, IIT Bombay
Objective - Tata CLiQ stepping into the Beauty Category METHODOLOGY ADOPTED Data Collection & Analysis Competition Analysis Proposed Solution Identify Ideal Customers Financials Business Model Canvas: Value Proposition & Channel Product & Service Concept Check the validity of the Idea Secondary Research to identify pain points of Indian Population Industry Analysis to identify booming products & competitors Competitor growth analysis Key Differentiating factors for Tata CLiQ Segmentation to identify Target customers Identify unique user trends of selected customers Product/Service Differentiation Category/Brand Assortment Plan Go-to-market strategy SECONDARY RESEARCH Men Women Mins per day spent on grooming 55 42 Mins per day spent on grooming 75% Indian men are concerned about their appearance Indian women are concerned about their appearance 66% Major pain points of Indian Population 29% Body Odor 30%Hair Greying 21%Excessive Sweating 35% Sign of Ageing & Bad breath Acne and pimples Baldness/hair thinning 25% 23%
SEGMENTATION (Resource vs Motivation) COMPETITOR GROWTH ANALYSIS Premiumisation has been driving the demand for beauty and personal care products. Premium beauty products come largely in partnership with a luxury or premium brand. Eg- lipstick launched by L Oreal in collaboration with Indian couture designer Sabyasachi. Companies like Freshistry and Emcee Beauties produce customised products taking the needs of their customers into consideration 50+ Female 18-45 age UNIQUE USER TRENDS AND KEY DIFFERENTIATING FACTORS (linked to Brand Assortment plan) Product Specifications and Offers/Discounts Preferences to products based upon Specific Ingredients (Eg Aloe Vera) Reasonable Price Point Offers & discounts is the top reason for buying beauty Partnering with influencers/celebrities Younger population aspires to become like celebrities, social media influencers. Eg- Kylie Jenner products online Greater emphasis on health care and wellness 47% millennials willing to pay premium for Organic/ natural ingredients TARGET GROUP Value delivered by the brand and Add Text Sellers 50% of consumers are willing to purchase online beauty products because of a trustworthy seller 70% of consumers opt for an established & recognized brand Age : 18 45 (Millennials & Gen Z) Gender : Male and Female Lifestyle : Urban or Semi Urban Mindset : Fashion & Brand Conscious (branded, premium, natural products) Income : Middle and upper middle class Need for convenience Younger generation needs fast fashion Products catering to simplistic routine & Multi- purpose products are likely to dominate the Need for personalization and subscriptions People are willing to pay for personalized experiences coupled with subscriptions Personalized consulting and specific solutions based upon skin tone and age beauty category. AI softwares for analysing skin, tone and recommending beauty products
BUSINESS MODEL CANVAS FOR TATA CLiQ BEAUTY CATEGORY Key partners Key Activities Value Proposition Customer Relationship Customer Segments Key Resources Channels Cost Structure Revenue Streams WHY OMNICHANNEL? MEDIUM TERM ADVANTAGE LONG TERM ADVANTAGE SHORT TERM ADVANTAGE Cost of Change Tata Cliq is already operating as an Omnichannel. Switching to a different channel will further add costs & complexities Differentiating Factor Tata CliQ is a Phygital store. It already has Online and Offline systems seamlessly integrated with each other. It allows Cross-Category Selling Increased footfall in Offline stores When the Covid situation subsides, more people will visit stores for physical trials, thus revenue will increase both online & offline Increased % of Perfect Orders It reduces the number of return requests by almost 70% because of option of product trial, select brands & brand authorized sellers. Better Consumer Convenience With Omnichannel, people can choose from: Ship to Home or Pickup at store As Consumer Experience is our top priority, Omnichannel will offer more trust than other models as the people will also have an option to physically test the product offline More Data Collection Greater amount of Customer Data can be collected (offline & online) for personalised offers and product recommendations
CATEGORY ASSORTMENT PROPOSED SOLUTION: PRODUCT & SERVICE CONCEPT Insights from Primary Survey 52.4% Unaware of their Skin, Face & Hair type authentic advice to choose products Services to be included 86.7% 38.5% Prefer to consult professional advice to choose a product Lack access to receive VR, AI technology for face scan, skin tone detection and recommendations Growth % Experts advice on types of hair/skin/face Recommend product with usage frequency Personalized service through past visits inputs/data Beauty Subscription Service on certain boxes/packages Major Differentiators AI/VR technology Beauty Subscription Service 2021 Recommended Brands to launch with, as per their performance in India in 2020: 1. MAC 2. L'Or al 3. Lakme 4. Maybelline 5. NYX 6. Bobbi Brown 7. Colorbar 8. L.A. Girl 9. Olay 10. The Body Shop Partner with AI, VR tech companies for apps like Loreal s Skin Genius, Olay Skin Advisor, Ministry XR. Benefits:- 1. Virtual Product trial 2. Personalized suggestions 3. First mover advantage (in India) 4. Huge drop in customer dissatisfaction - decreased return orders BRAND ASSORTMENT Give monthly/quarterly/yearly subscriptions on certain beauty boxes and packages Benefits:- 1. Customer Retention (increases loyalty) 2. Huge Data Collection for different customers, thus better future personalization 3. Personalized offers and discounts Data Point- A report from Royal Mail forecasts the value of the subscription box market to grow 72% by 2022 Key User Trends (Slide-3) Demand for a particular product category & brand) Seasonality of a product category. Example- Wedding season, Diwali etc. Factors affecting Brand Assortment Suppliers- It can include Brands or Brand authorized sellers. Example- New product launched by a Brand Online Expert Advice Use Case- Alibaba revealed they had increased their conversion rate by 4x since 2019 after they incorporated YouCam Makeup AR on their website. Sales Margin History- How much does Tata CLiQ earn on selling a particular product of a particular brand? Option to opt for online expert advice through Video call or phone call if the customer is not satisfied with AI, VR app.
COMPETITORS RESPONSE COMMUNICATION PLAN Promote Organic- Launch Digital campaign #WeCareForYou on YouTube/Twitter to promote natural products Potential Shift towards Omni- channel as it allows product trial Improving Data Collection and Analytics Developing of AI/VR apps or partnering with tech companies Shifting towards Organic products Influencer Marketing- Partner with popular celebrities, actors, & social media influencers. Seasonal Marketing- Special offers and discounts in Wedding season, No-shave November, Women s Day Increasing emphasis on personalized and convenient solutions for customers Contents Graph Contents Graph Increasing investment in Ads on social Media, print, TV ads Offering More Discounts & Offers on their platforms Digital Marketing- Social Media pages, Email Marketing Print Marketing- Popular magazines, newspapers FINANCIALS Units In crore Rupees FY 21 FY 22 FY 23 FY 24 FY 25 Assumptions: ONLINE= Rs. 8.7k cr YOY Growth = 51% Online BPC Market India 13.13k 19.83k 29.95k 45.23k 68.29k 10% The proposed initiatives suggested will increase Tata Cliq s market share in beauty segment by 1% every year One-time investment of Rs 10 crores is considered for all the offline store s modernization (improving infra) Monthly Employee salary considered as per Market standards ROI calculation is done for next three (3) years YOY Growth In Sales Turnover assumed around 4 to 5% Target Market Share of Tata CLiQ 2.90 % 5.03% 8.5% 12% 16.5% BPC Market in India in 2020= 87k crore Year FY 21 FY 22 FY 23 FY 24 FY 25 INCOME : Sales Turnover Total Income EXPENDITURE : 67% OFFLINE= Rs. 58k cr YOY Negative Growth 366.85 1030.64 2538.46 5420.6 377.17 1050.99 2545.75 5427.6 10926.4 10800 YOY Growth = 10% Raw Materials 168.42 477.74 1256.16 2954.35 5690.65 Tata Cliq is expected to become profitable by 2022 with the initial investment (Rs. 101 cr) expected to Break-even by 2023 Deals with Influencers, actors Employee Cost 46.39 156.75 369.37 484.37 807.8 India BPC Market Growth % 20 SG&A Expenses 48.8 278.8 414.4 856.7 1819..3 Modernization & opening new Offline Stores (5 years) 30 Initial Advertisement Cost AI/VR Partnership 25.80 30 51.0 0 90.2 0 206.4 0 555.75 0 Investment 101 Crores Modernization & Offline Stores 30 0.00 0.00 0.00 0.00 Total Expenditure (includes other expenditures) Operating Profit Gross Profit 1 Website/App Upgradation 407 -30.4 -31.5 965 85 83 2400 145 137 5218 263 256 10535 391 383 30 20 AI/VR Partnership with Tech companies (5 years) Digital Media Campaign Profit Before Tax Net Profit -36.7 -51.9 77.4 65 130.95 110 248.8 209 376.19 316
References https://www.export.gov.il/files/cosmetics/ReportonIndianCosmeticsIndustry.pdf https://www.mintel.com/press-centre/beauty-and-personal-care/indias-dapper-men-average-indian-man-spends-42- minutes-grooming-per-day https://www.mintel.com/category/press-centre/beauty-and-personal-care https://brandequity.economictimes.indiatimes.com/news/business-of-brands/indias-cosmetics-market-to-grow-by-25-to- 20-billion-by-2025/62845033 https://getshogun.com/learn/pure-play-omnichannel-ecommerce https://redseer.com/newsletters/online-beauty-market-updates-june18/ http://iimraipur.ac.in/cde/pdf/Nykaa.pdf https://lapaas.com/nykaa-business-model-detailed-case-study/ https://brandequity.economictimes.indiatimes.com/news/marketing/nykaa-reveales-its-omni-channel-content-and-guided- selling-strategy/70841130 https://yourstory.com/2017/06/tatacliq-flipkart-amazon https://www.marketing91.com/retail-assortment-planning/ https://yourstory.com/2020/02/nykaa-bigbasket-amazon-cosmetics-industry-startups?utm_pageloadtype=scroll https://medium.com/the-ken/tata-cliqs-quest-for-profitability-24a6bde8cbee
