Recode Studio's free lunch with make-up classes wins over Shark Tank judges, but gets no money

• Recode Studios is a makeup brand and online marketplace based in Ludhiana.
  
• It clocked net sales of ₹15 crore with a net profit of ₹48 lakh for FY22.
  
• Recode Studios, founded by Dheeraj Bansal and Rahul Sachdeva, pitched on Shark Tank India S2 but none of the sharks invested.

The few episodes of Shark Tank India season 2 aired, are already trending on social media. And, the company that dominated discussions online is one that received no funding — Recode Studios, an online marketplace and makeup brand.

Punjab-based acquaintances Dheeraj Bansal and Rahul Sachdeva started Recode Studios as a makeup brand in 2018. Later, in 2021, it grew into an online marketplace selling cosmetics across 60 brands.

Sachdeva was already in this line, working with a cosmetic brand, Make Over, and had gained the necessary expertise in the industry. Bansal however worked as a manufacturer of bicycle spare parts before starting Recode.

"When Rahul approached me with the proposal, I recognised the chance to advance in this field and went from the bicycle to the cosmetic industry. Rahul's marketing expertise in the cosmetics industry and mine in management and operations helped us kick-start our venture,” Bansal told YourStory.

Started in 2018, Recode Studios launched its brand with products like nail paint, lipsticks, eyeliner and kajal — which are make-up kit must-haves. The founders saw that affordability was always an issue for buyers, and that struck a chord with them.

The decision to shift from a pure cosmetic brand to an online marketplace came when the company suffered severe losses during the pandemic. Consequently, the founders shared on Shark Tank India that they decided to sell-off their products, which were going to expire in 8-10 months, in a ₹1 flash sale.

“This allowed us to get consumer feedback on the quality of our products while also being economically lucrative. Since everyone we sold to spread the word to their friends and family, we also increased our customer base,” Bansal further added.

They built a strong customer base among middle-class households who find international brands too expensive.

Other than its own make-up products, the platform also offers products of brands like WOW Skin Science, Colorbar, Mirabela and others. The company imports products from countries like Germany, Thailand and Taiwan.

It has a tie-up with over 300 offline stores and has three franchise stores in Delhi, Faridabad and Raipur. It also has a presence on Amazon, and sells pan-India through its own website as well.

Unique customer acquisition strategy

The cosmetic brand pitched on the premiere episode of Shark Tank India season 2 to raise ₹1 crore in exchange for 1% equity. While pitching, both Bansal and Sachdeva explained their customer acquisition strategy.

The startup organises offline makeup classes for girls in five-star properties that last 3-4 hours, at ₹1,500 per class. Famous makeup artists teach them different make-up techniques, and they receive products worth ₹1,500 along with a free lunch at the venue.

“This is a no profit no loss move and actually a cost to the company,” said Rahul in the show. “The students then come to buy those products again and that’s how we build our customer base,” he added.

This unique customer acquisition strategy impressed the sharks in the show, especially Lenskart founder Peyush Bansal, who quipped that even he would try to offer free lunch at eye-testing camps.

Recode didn’t get any funding on the show, allegedly because it was a direct competitor of Sugar Cosmetics - the venture founded by shark Vineeta Singh. Nevertheless, since the episode aired, Recode and its acquisition model has gained a lot of traction on social media.

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