Analysts at Verdict Retail have predicted that the online health and beauty market will grow by around 80% between now and 2019. With millennials (other names include Gen Y and the ‘selfie’ generation) consuming ubiquitously across multiple devices, and that much more concerned with their appearance, this shouldn’t come as a surprise.
So how does Escentual.com stand out in a sea of readily available beauty e-commerce players? And how did its parent company RK Aggarwal Ltd secure a position on a list of fastest growing beauty retailers in the London Stock Exchange’s landmark list of 1,000 Companies to Inspire Britain 2015?
“Much of this is down to the huge amount growth we’ve seen in the past three years,” explains Rakesh Aggarwal, founder and CEO of Escentual. “More and more beauty customers are looking to buy online and we’ve been successful in carving out a significant amount of online market share despite having to compete more and more with the big department stores.”
The Cardiff based e-tailer was commended in the report for sustained growth over the past four years, achieving a turnover of over £14m in the last year alone. As a result, it recently made the move to a bigger warehouse space in order to keep up with sale expansion. In the 12 months to March, Escentual shipped 300,000 orders from over 200 premium beauty brands.
And it all started in his parent’s garage.
The high-end online beauty retailer, which stocks brands including Burberry, Clarins and Dior is a family-grown business, launched by Raj Aggarwal 15 years ago as an online arm to his father’s chain of pharmacies in and around Cardiff.
I congratulate Aggarwal on the mention in the report and he thanks me profusely. “It’s nice to have a benchmark to compare ourselves against,” he explains. “We work in isolation so it can be difficult to know how we’re doing compared to the rest of the market. Because we don’t have external capital, we have to be careful about how we grow.”
The company currently employs a team of 51 full-timers and by the end of this year it will increase to a headcount of 90 – well they had to do something with all the extra space in the new 37, 675sq ft warehouse.
“Our staff turnover is very low,” Aggarwal tells me, “if you cut members of the team through the middle you’d see the brand through and through. They’re the business really; I just ask some questions. We have a daily head of department meeting and I’m simply there to make them accountable to each other, I’m more ‘chair of the committee’ than leader.”
Online beauty sales have been kept buoyant by the mélange of Amazon’s branded offer, while pureplay specialists continue to grow share by providing the latest beauty trends and sourcing niche brands. But there’s more than one online destination that focuses on cosmetics, for exmaple FeelUnique.com, so why would a consumer choose Escentual?
“We retain a lot of organic customers,” Aggarwal says proudly. “Every site has its legacy and there are differences in terms of how we do our customer acquisition. I still have customers who shopped with us at the start, that continue to do so once or twice a year.
We started in fragrances [Escentual is a play on the word scent] and we have a strong heritage in the scents and premium makeup category,” he adds. “FeelUnique specialised in ‘hair and salon’ and then they moved across categories. We have a longstanding relationship with these brands and we were the first to coin ‘French pharmacy’