US discount razor group to challenge local player in 2013

The group deals market is going to get even more crowded with the launch of two niche sites in Australia offering customers cheap razors via the internet.

Internet phenomenon the Dollar Shave Club is launching in Australia in around two months’ time after achieving instant success with its concept in the United States.

The company offers customers monthly subscription deals:

• $4 a month for five cartridges a month of the “humble twin” shaver.
• $7 a month for the “4X” shaver.
• $10 a month for three cartridges of the “executive” shaver which has six blades and moisturising strips.

The Dollar Shave Club raised over $US1 million USD in seed funding to start up in the United States after it was launched by chief executive and founder Michael Dubin through a YouTube video in April 2011.

The video, which shows Dubin riding a forklift, playing tennis and dancing with a bear has received more than seven million views, and The Dollar Shave Club signed up 12,000 customers in its first 48 hours:

{qtube vid:=ZUG9qYTJMsI}

Hot on its heels, local deals site and Smart50 finalist, eSOLD, is also planning to launch a deals site for shavers early next year.

Founder of eSOLD, Ben Stefanescu, told SmartCompany he was still finalising the plans for the site however it will differ from The Dollar Shave club’s offering.

“We are looking to let people buy three months or six months of razors at the time, we think posting a pack every month is a little bit inefficient so you save more money ordering three or six months at a time,” he says.

“We would be looking at under $3 a month and if you are not adding delivery every month our offer works out much cheaper.”

Stefanescu says “it’s a good question” as to whether Australia can support two deals sites for razors.

“Australia is a very small market compared to the US but the fact that we are well established and have a very loyal customer base gives us a heads up,” he says.

Telsyte senior research manager Sam Yip told SmartCompany Dollar Shave Club appeared to offer a genuine alternative to many group deals sites.

“The one thing they have done right is to target a niche as the market is quite saturated with generic deal sites. This the right thing to do, especially since consumers are now accustomed to the deal site structure,” he says.

“If you look at Catch of the Day, they started off with Catch of the Day which is quite generic and all centred around the deal and the discount, it was really about the model and the mechanism and getting consumers to be comfortable with purchasing through discount model online. Once that was successful they specialised in Vinomofo for wine and Mumsgo for Mums.”

Yip says the timing is right for the launch of The Dollar Shave Club as customers are now familiar with online shopping and deals sites so the business is more likely to succeed than it would have two years ago.

“Australia’s appetite for online shopping is ever increasing as you can see with the Click Frenzy attention, it demonstrates the appetite is there,” he says.