HOUSE OF ACQUISITIONS

From legacy players to early-stage companies, many are eyeing the HoB business model, leading to stiff competition in the space

- S SHANTHI

House of Brands (HoB) as a business model has raised quite a few eyebrows in the last two years. Even though it was a natural progression that was waiting to happen, given the boom in e-commerce in India, its potential was hugely felt when players like MyGlamm, Furlenco, EatFit started moving in that direction with the launch of Good Glamm Group, House of Kieraya and Curefoods respectively. Today, with the rise in the success of this model, many legacy players have entered or are closely watching the space, giving tough competition to existing players.

COMPETITION FROM LEGACY PLAYERS AND OTHERS: In June last year, Indian conglomerate Aditya Birla Group made a foray into the space with the introduction of TMRW. With the launch, it announced its plans to acquire and incubate over 30 brands in the coming three years. Some D2C brands under its umbrella today are Berrylush, Bewakoof, Juneberry, Natilene, Nauti Nati, Nobero and Veirdo. In November last year, the company said that it expects TMRW to cross an annual revenue rate of over INRs 1,500 crore over the next 12 months.

“More FMCG giants will compete in this space. They have all the ingredients such as brands, robust supply chains, capital and customers. All they need to do is bring in tech talent and build the digital piece and they would completely emulate the HoB or digital-first model,” said Padmaja Ruparel, co-founder, IAN and founding partner, IAN Fund. Ironically, players like Mensa and GlobalBees are being called the digital version of companies like Hindustan Unilever (HUL) and Procter & Gamble (P&G). HUL had in fact said that its digital channel now accounts for 25 per cent of demand. It had said it reaches 9 million stores digitally and sells 60 billion units.