Business idea evaluation of bespoke cosmetic business in the MENA region

The client was evaluating the investment opportunity in a new age company in the women’s cosmetics business offering real-time customized cosmetics curated in consultation with a team of  experts.

Problem Statement

We were engaged to undertake comprehensive internal and external due diligence involving:

• Market scoping in the UAE region
• Business case validation to enable a sound data-based decision
• Risk-return estimation and understanding fund commitments

Action Taken

External Due Diligence:
A comprehensive market assessment was undertaken involving:

• Customer persona creation to estimate the total addressable market
• Competitor analysis including SWOT of the strategies adopted in the US and the MENA markets
• Channel strategy evaluation to analyze the potential of in-store partnerships, online and brick and mortar stores

Internal Due Diligence:
We developed an independent and market validated financial plan to undertake an assessment of the initial funding
requirement for a unit store which involved:

• Capturing various scenarios to establish the IRR for variances in estimated average checks and daily footfall
• Launch and ramp up plan development
• Founding team capability analysis
• Brought forth the key challenges and opportunities and recommended go-no-go on the investment

Deliverable

• Our analysis enabled the client to benchmark the IRR vis-à-vis its internal hurdle rate and estimate the payback period.
• The client leveraged the recommendation to decide on the investment opportunity and hedge against any potential risks