- Entrepreneurs: Rahul Sachdeva, Dheeraj Bansal
- Business: Makeup Brand
- Ask: ₹1 Cr Lakh for 1% equity
- Valuation: 100 Cr
- Result: No Deal
- Sharks: No Deal
Recode Studios: Transforming the Makeup Industry with Affordable Excellence
Imagine a makeup brand that offers international-standard products at reasonable prices, accessible to everyone. That’s precisely what Recode Studios, an Indian makeup brand, aims to deliver. With a unique blend of quality, affordability, and a dash of innovation, Recode Studios is making waves in the Indian cosmetics market.
Accessible Everywhere: Online and Offline Presence
Recode Studios has strategically positioned itself both in the digital and physical realms. You can find their products on their own website and app, but they don’t stop there. With a retail presence in 250 shops across India and three thriving franchises in Faridabad, Delhi, and Raipur, Recode Studios is truly accessible to makeup enthusiasts nationwide. In 2021, they ventured into the marketplace arena, offering a platform for over 60 other beauty brands, further expanding their reach.
The Financial Success Story
When they pitched on Shark Tank, Recode Studios had already achieved remarkable financial milestones. Closing the financial year 2021-22 at ₹15 Crores and having generated ₹11.5 Crores by the time of their appearance on the show, they were well on their way to success. Their projections hinted at a minimum target of ₹30 Crores by the end of the year. Impressive as it may sound, their financial acumen was equally noteworthy, boasting a 6% net profit margin after taxes, amounting to ₹65-70 lakhs.
Innovative Marketing Strategy: Empowering Makeup Enthusiasts
Recode Studios doesn’t just sell makeup; they empower individuals to master the art of makeup. They collaborate with makeup artists across the country to offer makeup technique classes. Their primary focus is on college students, whom they reach through pamphlets. For a mere ₹1500, students not only gain valuable makeup skills but also receive products worth ₹1500 for free, along with lunch during the classes. These classes, typically lasting 3-4 hours, are hosted in top-tier hotels and properties. Their outreach model touches around 1000 people per month, even in the off-season. The sharks were undeniably impressed by this innovative approach.
The Marketplace Survival Story
The journey of Recode Studios was not without its challenges. They initially started with just 5-7 SKUs (Stock Keeping Units), but then the COVID-19 pandemic hit. Faced with financial struggles and the prospect of shutting down operations, they made a pivotal decision. Instead of closing shop, they sold products nearing expiration, pricing them at just ₹1 each, available all over the country. This strategic flash sale not only saved the business but also introduced many customers to their products. The loyalty of these customers proved instrumental in keeping the brand afloat.
Record Shark Tank Negotiations: A Mixed Bag
As the sharks delved into the conversation, questions arose about Recode Studios’ niche in the crowded makeup market. Rahul, representing Recode Studios, highlighted that they weren’t competing with established brands like Suger and L’Oreal, as there were only 7-8 brands in the organized sector focused on their particular market segment.
However, the sharks’ reactions were a mixed bag. Namita exited the deal immediately, citing a personal principle of not investing in competitors of her friends’ businesses, referring to Vineeta’s Suger Cosmetics. Aman followed suit, sharing the same reasoning. Peyush provided feedback that while he believed there was potential, he felt he couldn’t add significant value to the brand, so he declined as well.
Vineeta, despite liking the products, opted out due to concerns about market size. Given her ownership of a brand in the same niche, she felt the market might be too limited for Recode Studios. Anupam, on the other hand, was impressed with the business model and what they had achieved. However, he voiced concerns about the valuation and felt apprehensive about their decision-making process, leading him to decline the offer.
Peyush, with a touch of humor, mentioned his intention to start offering eye checkups at 5-star properties with meals, inspired by the success of Recode Studios’ model.
What happened to Recode after Shark Tank India?
While Recode Studios did not secure a deal on Shark Tank, the exposure and feedback they received were invaluable. Viewers and the media praised their business model, and the company implemented some of the feedback provided by the sharks, including improvements in their packaging.
Reports suggest that Recode Studios achieved revenue of ₹26.5 Crores in FY22, with a net profit of ₹48 lakhs. The company expanded by opening additional franchise locations in cities like Mumbai and Hyderabad.
As of September 2023, Recode Studios is still thriving and expanding, boasting over 278K followers on Instagram. Their commitment to providing quality makeup products at affordable prices remains unwavering, making them a formidable player in the cosmetics industry. You can explore their offerings on their website: Recode Studios.
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