Colgate-Palmolive, the $20 billion New York-based consumer goods giant, has announced a unique corporate-startup alliance by handing over its D2C and ecommerce business of the mainline Palmolive personal care brand to Bombay Shaving Company (BSC). According to reports from Business Standard, this arrangement represents a virtual takeover of key marketing functions across the fastest-growing channels by a partner considered better equipped for D2C operations. The partnership builds on an existing relationship, as CPI had taken a minority 14% stake in D2C brand Bombay Shaving back in 2018. Under the new structure, BSC will handle all D2C and ecommerce advertising and consumer relationships for Palmolive, while Colgate-Palmolive India (CPI) retains management of the brand across general and modern retail channels.
The partnership is driven by substantial consumer behavior shifts, with 150 to 250 million people now buying online across India. As reported by Business Standard, over 11,000 D2C brands operate across categories including food & beverages, apparel & fashion, beauty and personal care, home & lifestyle, and small consumer electronics and durables. The D2C market size is estimated at around ₹1 trillion, creating significant opportunities for established consumer marketers to expand into online-first segments. This trend reflects the broader shift in consumer purchasing patterns, with digital-first brands gaining traction among Indian consumers. According to Fireside Ventures co-founder Kannan Sitaram, steadily rising incomes, growth in digital commerce and advent of millennials and GenZ consumers have reshaped consumption, expanding consumer preferences and offering possibilities for start-ups.
CPI's Managing Director & CEO Prabha Narasimhan reportedly acknowledged the company's limitations, stating "We did try it on our own, and honestly, I don't think we are best in class." According to Business Standard, this represents a rare admission by a big consumer marketer about their own shortcomings in D2C marketing mechanics. TDV Partners founder Ujwal Sutaria explained that start-ups have captured the wallet share of new age customers, building around specific audiences and creating content, storytelling and strong user bases mostly online - exactly where incumbents lack presence. As reported by Fireside Ventures, large FMCG companies' strength lies in physical distribution and retail points, but with e-commerce and quick-commerce, that advantage has diminished. Kae Capital's Sunitha Vishwanathan cautioned against calling it a broader trend based on one transaction, noting that many large FMCG companies already run their online businesses themselves and have been investing in capabilities for the last five to eight years.
The arrangement follows established outsourcing models where companies like Nike and Apple focus on core elements while outsourcing manufacturing globally. As reported by Business Standard, acqui-hiring has become common, with examples including Google's DeepMind and Meta's strategic stake in CRED. The CPI-Bombay Shaving deal represents a virtual takeover of key marketing functions across D2C and ecommerce channels, potentially setting a precedent for other major marketers to redefine their core competencies. TDV Partners' Sutaria foresees a possible trend with winners on both sides, noting that D2C brands like Bombay Shaving Company have spent years understanding online buying patterns and capturing attention while maintaining unit economics at scale. The deal may have sent shivers down corporate hierarchies given the boldness with which a core operation was separated and given to an outsider with expertise thought to be lacking within CPI's own ranks.
