With a consistent doubling of annual sales, gross margins exceeding 50 percent, low customer acquisition costs and strong repeat traffic, the Indian e-commerce startup That’s Personal touts financial metrics that venture capitalists typically salivate over.
And despite this, it is yet to see a single big-name investor.
Indians who, like many people the world over, prefer to keep sex purchases private, That’s Personal offers adult products—edible body paints, slinky lingerie, erotic board games—to them. a boom in so-called sexual wellness products will be sparked by gradually liberalizing attitudes toward sex, of founder Samir Saraiya’s bet.
But much of Indian society remains prudish, more than two millennia after the publication of the Kamasutra sex manual. And as a result, $5 million investment into his three-year-old company is being found to be difficult for Saraiya. fear Indian officials will shut down That’s Personal if it runs afoul of conservatives and the uncertain regulatory environment are issue that are holding back investors. This is a nation, after all, where even dating apps have been forced to tread carefully.
Getting others to pony up will be a challenge, says Rajiv Sahney, who runs the India offices of New Vernon Capital, participated in an angel round 18 months ago that raised $1 million. “There are people in India with a view on what India is and what India should be,” he says.
And deaf to Saraiya’s entreaties have been even potential backers who deem the online adult segment a winner. “Will this category do well?” asks Nikhil Khattau, managing director at the India unit of Silicon Valley venture firm Mayfield. “Sure! Is it investible? Difficult to say.”
But schlepping to venture firm offices with a bag full of his merchandise, Saraiya remains undaunted. “Investors need to be educated on what this category is all about, what is a cream, what is a lubricant and what is the product range we stock,” he says.
Saraiya never contemplated selling Fifty Shades of Grey merchandise when he quit running Microsoft’s Southeast Asia business development office in 2011 to join India’s e-commerce revolution. But a dozen or more players were present in every big e-commerce segment already, Saraiya quickly discovered. But as Saraiya trudged to a distant neighborhood where no one knew him as he was too mortified to buy condoms in the store opposite his apartment building and this became an inspiration to him. And the same problem was faced by at least a few hundred million of his compatriots, he was certain.
“That was it,” he recalls. “I decided to solve my own problem.”
India’s changing demographics have worked to his advantage. Under the age of 45—many of them digitally savvy and willing to try new things, is nearly three-quarters of India’s 1.3 billion citizens. The ware was snapped up by shoppers from India’s biggest metropolises as well as smaller towns. Today, more than 40 percent of the buyers are women. One of the most popular products is women’s intimate shaving cream. “In India people glare at a woman if she smokes,” Saraiya says. “Can you imagine a woman walking into a store and asking for this cream?”
“One day soon—who knows it could be next year—it will be the right place and the right time for this kind of e-commerce in India,” says Saraiya.
(Adapted from Bloomberg)