Shantanu Deshpande: Public memory is fickle. Public love is permanent

Shantanu Deshpande is not known to mince words. But 2022 stood out as a turning point where one post put out by him on LinkedIn sparked a firestorm. He opined that young people starting out in their careers should work for 18 hours a day and avoid rona-dhona (cribbing). He was immediately cancelled online, and faced a backlash.

As Deshpande puts it, “I realised your words carry weight and sometimes, people who know you directly, people who follow you on social media, they will know you because they followed you for a long time. They will get kind of where you are coming from. The moment your circle of influence goes beyond that significantly, you don’t have the luxury of giving context to people.”

When Deshpande connected with Storyboard18, the talking points ranged from diving deep into the performance of Bombay Shaving Company, the presence of the company’s offerings in army canteens, its brand proposition, its women’s category Bombae followed by its marketing and communications strategies and a lot more.

Read on.

How was the past financial year? What are the highlights and areas of work in the report card?

Bombay Shaving Company has done very well. We are now not only Bombay Shaving Company. We are Bombay Shaving Company, Bombae and ‘100 days’ which is our service arm. It is a collection of three companies which consolidate into the holding company.

We have grown 75 percent. Our profitability is up by 20 percent. Our team has expanded, our channels have gone up significantly. Strategically, we are now reaching consumers. For example, offline, we have now penetrated into D-Mart and Reliance Retail in a large way. We have penetrated into army canteens in a large way. These are a kind of high-gestation but very effective channels.

Even the instant grocery segment, the category itself took off. So, across online and offline, we did well. Hair removal, hygiene and personal care are the categories we operate in for men and women. They have done well. We are closing the year at roughly Rs 190 crore in net revenue, and a run rate of almost Rs 260 crore in net revenue. It is a 70 percent growth from our previous year. We are looking to continue the growth momentum in FY24 as well.

We have seen a lot of digital-first or digital-born brands after a few years getting really aggressive offline. How is offline faring for you?

Digitally native or brands that are born on the internet have a certain DNA. You launch products, they are slightly more premium and consumers are ready to pay more. But you realise, especially in categories like ours that are grab-and-go, consumers want them now, they want them fulfilled now. Sometimes, they don’t want to wait for two to three days for Amazon to deliver. They want to see it when they go to the neighbourhood kirana stores, or when they go to an army canteen, or they go to D-Mart for their shopping. They want to see your product there.

I think after the first 4-5 percent penetration in terms of households, offline becomes super critical. However, it is important to know that the ballgame offline is a lot more about assortment, merchandising and commercial relationships. You have to be a lot more financially prudent.

There is inventory locking, and you have to manage working capital as a company, which a lot of young brands struggle with, including us. We have taken some time to understand this.

Investors like Colgate-Palmolive and Reckitt who are experts at it helped us and guided us in terms of figuring out what are the metrics to follow.

Investors like Colgate-Palmolive and Reckitt who are experts at it helped us and guided us in terms of figuring out what are the metrics to follow.

The grooming category itself is highly competitive. Mass and legacy brands dominate the market. How are you looking at carving a bigger share of the market and unlocking the next level of growth? What's your ambition?

Number one, make sure that you have a product that gives consumers happiness. When you are removing hair from someone’s body, or giving someone a hygiene experience, people expect very base functional products. If you give them something delightful, even marginally delightful, people will like it. For example, if you look at our shaving foams, foam is a product that goes closest to your nostrils. It is closer than face wash or soap. Fragrance is important.

Second, most men shower after they shave. So, for the fragrance to linger is important. Most men wear a baniyan or a T-shirt while shaving. They don’t want water to leak on their necks. So, these insights are important, we understood them, and observing these insights are hard because shaving is a very private in-the-bathroom experience.

Our consumer insights and consumer delight team very uncomfortably went into people’s bathrooms and watched them shaving, including family members and friends. For example, our foams are either turmeric or charcoal, or coffee. They look like ice cream, they come out colourful. It is completely different in a category that has had the same thing for a long time.

Our consumer insights and consumer delight team very uncomfortably went into people’s bathrooms and watched them shaving, including family members and friends.

We apply the OBCD principle—Only Bombay Shaving Company Can Do. We put that bar on our products and we price it well, and penetrate it as much as we can.

The moment the product goes into the consumer's bathroom, we try to find a way to figure out whether they are happy, and that’s all we want to do. This is foundational. Everything else is execution.

How different was it to innovate and create products and the brand in the men’s category versus the women’s category with Bombae?

Number one, men are hard to engage, easy to please. It is very hard to get attention, it is very hard to change the way they do a certain thing. If they have gotten loyal to a brand, they don’t want to switch it, they don’t want to think about it much, and they don’t talk about it much. But once you enter the bathroom and give them a great experience, they will be loyal. Then, they will stick to you. It is a matter of time.

Women, on the other hand, are easy to engage and hard to please. Women are a lot more social about their personal care products or beauty products. But the bar on the product has to be a lot higher. There is a lot more competition, and the consumer is a lot more evolved in their understanding of the category.

The second thing is, in the men’s space, there are few very well-established incumbents. You have Gillette, Phillips, they are extraordinarily successful companies, and people look up to them a lot.

In the women’s segment, we are moving consumers from services into products. So women, for hair removal, have typically gone to a salon, and had a preferred stylist to give them a waxing experience. We are trying to move women from that to DIY (do-it-yourself) in the bathroom where they are using a product for the first time, using at home waxing strips, or a trimmer on their eyebrows for the first time. Again, different.

Third, we are taking hair removal from a functional category to a beauty category. So if you see the way Bombae communicates its proposition, the product is beautiful, it has got hues of boldness and sassiness. But it’s more about beauty.

Men are hard to engage, easy to please. Women are easy to engage and hard to please.

It is a very different ballgame. I realise that I don’t understand the consumer and the category at all. It is important to have an all-women consumer-first team, which uses the foundational elements of Bombay Shaving Company.

It is our product insights, our sales team, our channel team, etc. But the category, the brand and the consumer-facing team is completely independent. It is headed by Siddha Jain, who joined us from Bain & Company to be the chief executive officer of that business. It is an engine and a life of its own.

It achieved in two years what Bombay Shaving Company took 4.5-5 years to achieve. The good part is that they have not made all the mistakes that Bombay Shaving Company did.

It is a very different market growth game in men and women categories. But I think there is equal opportunity in both. If you ask me, in four to five years, if we are going to build a Rs 3,000-crore business, I would say, half of that will come from our men’s business and the other half will come from our women’s business.

What’s the ambition for the services part of the business?

When Reckitt and Colgate-Palmolive invested in our company three to four years back, I think, we started working with them for their brands.

Reckitt was kind of super excited about the initial results, and we started working with Durex, which is their sexual wellness brand in India. We kind of worked with them on D2C. Visage Lines, which is our company, is the whole and sole exclusive D2C partner for Durex in India.

I am not at liberty to say what has happened, but it is a fairly public business. Just disproportionate impact in terms of sales. D2C for example for Reckitt is competing with instant grocery and e-commerce in terms of revenue, and is far ahead in terms of average order value because they are able to do a lot more there.

That is when we realised that the biggest challenge for building a D2C business is top of funnel. That is where the most inefficient marketing spends are, which is to make people aware of Bombay Shaving Company, aware of Bombae, which took the most money. After that, it became easier.

But all these established brands have solved that. So brands that are 10-15-20 years into (the business). But their DNA is offline and distribution and large-scale television marketing. They don’t know D2C or e-commerce and they lose share there compared to new-age businesses.

So, across categories, our 100days has gone after Rs 1,000 crore-plus brands, and told them, “Guys! You do offline distribution and television marketing brilliantly well. Let us be an exclusive D2C or e-commerce partner for you.” That’s kind of hit the ball and our entire aim is, “Aapka jo offline market share hai, (what your offline market share is), that will become your online market share.”

So, across categories, our 100days has gone after Rs 1,000 crore-plus brands, and told them, “Guys! You do offline distribution and television marketing brilliantly well. Let us be an exclusive D2C or e-commerce partner for you.”

Once we do that, we will hand the brand back to you. It’s your brand, it’s your business, take it. We now have nine clients, it is a flourishing business, we have a CEO in place. It is profitable and is bringing cash back into our business. For us, I think, it is not a revenue driver primarily. It is a business that helps us create distribution, intelligence and relevance as a company.

On all our platforms put together we now get 15 billion visitors per month. And Bombay Shaving Company and Bombae is only 8 percent of that. Ninety-two percent comes from the rest. So, we are a lot more intelligent as an organisation.

How have your marketing spends grown over the past two years? In terms of media investments, how and where do you deploy your spends?

Our marketing to net sales ratio has actually dropped. It has dropped from 100 percent in FY21 to roughly 70 percent in FY22 to roughly 40 percent in FY23. Our target for next year is 25 percent. It is a function of sales. We channel back sales into marketing, we are not dipping into equity money for our marketing anymore. As revenues grow, net percentage goes up significantly.

From a media perspective, we used to be a 100 percent performance marketing business. We are 70 percent brand and 30 percent performance marketing business. We don’t believe in acquiring consumers through performance beyond a point. I think marginal acquisition costs are just too high.

We believe in great content and distributing that great content through online channels, through discovery as well as to classic top-of-funnel acquisition channels as well as through instore merchandising.

We used to be a 100 percent performance marketing business. We are 70 percent brand and 30 percent performance marketing business.

We have started doing a lot of guerrilla marketing. For example, the Rajasthan Royals effort was six cities, hoardings, Dainik Bhaskar, and all of that stuff. We are still experimenting with it, and with the size of our company, we cannot do a lot with that. On television, we are on news channels. We probably have been on CNBC a bunch of times as well.

Let’s talk about your content marketing strategies like the podcast you started? What’s your approach and how has it changed in the last few years?

For a category like ours, in the consumer’s mind, you don’t get a lot of space. Consumers have other things to worry about. However, consumers are extremely interested in certain things that affect them. And one of the things that affects a lot of our target consumers is their future, their financial stability and entrepreneurship.

As a company, because our category is grab-and-go, there’s only so much content you can create that is engaging. At the end of the day, there is just, what we call, advertisement fatigue. Consumers, when you show them ads, because of Instagram screens or Facebook screens, they scroll past ads quickly, and they just don’t register for most young consumers.

You have to find a way for your brand to start appealing in ways that are beyond the product proposition. Of course, all of that is important. But scale won’t happen because of that. Consumer love won’t happen only because of that. That is how the podcast became a thing. My LinkedIn account, where I have 100,000 followers, is a vibrant place for consumers to engage with a brand because I talk about entrepreneurship.

You have to find a way for your brand to start appealing in ways that are beyond the product proposition.

Our marketing head said, “Why don’t we take your LinkedIn and convert it into a podcast as a marketing property for Bombay Shaving Company?” So we started getting entrepreneurs, talking to them, putting it out. We named it “The Barber Shop” which is a very interesting way to have (an in) to the brand. You will see our logo everywhere. But it does not look like an ad. It looks like me talking about entrepreneurship. That’s what gives it what we call surrogacy, in terms of salience, and consumers are attaching themselves to it.

Today, when I was at the airport, I was very flattered when people came and took selfies with me. At least five selfies per flight, for example. And you know now that people are getting to know about Bombay Shaving Company, it has started reflecting in our NPS (net promoter score), TOM, all of these metrics. We do this with everything.

Today, when I was at the airport, I was very flattered when people came and took selfies with me. At least five selfies per flight, for example.

For example, we did IPL (Indian Premier League) this time with Rajasthan Royals. The objective function was clear. We do Rajasthan Royals as a grooming partner, we put our products in six cities in Rajasthan. Go deep, get into Dainik Bhaskar, a couple of other local publications, do vernacular marketing and see how sales are. It is very effective. We have realised that to find ways to make our brand relevant, you need to find ways to get into the consumers’ minds that are beyond the product and function of the product.

We keep learning and the idea is being authentic, genuine, putting good content out there. When we put out good content, we track it, we make sure we press the pedal, see if something is working well, and that is how it works.

The cult of celebrity founders—do you at any point in time see that as some sort of hindrance? How do you see that especially when it backfires sometimes?

The LinkedIn episode around the 18-hour workday was a very eye-opening one. Suddenly, I realised, your words carry weight and sometimes, people who know you directly, people who follow you on social media, they will know you because they followed you for a long time. They will get kind of where you are coming from. The moment your circle of influence goes beyond that significantly, you don’t have the luxury of giving context to people.

The LinkedIn episode around the 18-hour workday was a very eye-opening one. Suddenly, I realised, your words carry weight

A lot of things are taken out of context. Having said that, my belief is that, especially in consumer brands, it is important for the founders and the management team and the companies to come out there and tell their stories. Consumers are very smart, and they want to know where their product is coming from. They are not going to get guided by advertising beyond a point. They want to know.

If the founders, or the CEO, or the management team or the head of product is able to come out there and talk about, “Hey! Here is how we make our products for you. We value what we do. Here is who we are.” You will see consumers relate to the brand a lot more because they relate to the people behind the brand.

In today’s day and age, we would be doing ourselves a disservice if we are not putting ourselves out there.

That is important for consumer brand founders to do. The Indian middle class value system kind of tells you to work behind the curtains and don’t look for attention, it’s frowned upon. I think in today’s day and age, we would be doing ourselves a disservice if we are not putting ourselves out there. It is very easy to do. The responsibility is on you. You can’t get infamous because of negativity. Doing something wrong, or being rebellious for the sake of it, or doing some fraud in your company and getting into the media... That kind of stuff goes the wrong way. Beyond a point, people will call you out.

My belief is that, especially in consumer brands, it is important for the founders and the management team and the companies to come out there and tell their stories.

But if you are authentic, and even if you are someone who has a strong point of view that people will disagree with, as long as you are consistent, authentic and can back it up, it is great for founders to be out there and talk about their businesses and brands. Once in a while, you will get into a storm, it is fine. Eventually, public memory is fickle, public love is permanent.

What can we expect from your brands in terms of innovative marketing initiatives in 2023?

We are constantly trying. My personal belief, which the company does not agree with, is that there is a large market for bald men who need to shave their heads. I clearly have a personal agenda there. But it is a huge market. Men who are bald and don't know how to shave their heads have to go to a salon, and want to shave their heads three-four times a week. There is no product out there. We want to launch products and categories such as this. We have used ‘The Barber Shop’ and ‘My Personal Face’ to do some of these interesting things.

My personal belief, which the company does not agree with, is that there is a large market for bald men who need to shave their heads.

People have not succeeded in beating the big boy in razors. Everything else you can do well. But, in razors, it is almost impossible. Everyone has told us that you will lose. But we believe that through viral marketing, reality television, our own reality TV show on Instagram, we believe that we actually can win the razors game through a very interesting approach.

So I think there are a lot of things we have up the pipeline. Some of them will work, most of them won’t. We will see where we can get. I think the idea is to be super sharp in terms of objectives.

One of the things that we have learnt as an organisation is to be very sharp in terms of our objectives of marketing. We have a new chief marketing officer, Gauri Malhotra. So looking forward to a lot of very classic marketing excellence coming at the company as well.

Also watch Shantanu Deshpande in conversation with Storyboard18's editor Delshad Irani on CNBC-TV18.