Underweight Deal: Subscription Boxes with a French Focus

Key Stats:

Summary

OuiPlease has been selected as an “Underweight Deal” by KingsCrowd. This distinction is reserved for deals not selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com. 

Problem

Subscription boxes are simply booming. McKinsey reports that subscription e-commerce has grown by over 100 percent per year for the last five years and that the largest retailers generated $2.6 billion in sales in 2016 (undoubtedly much larger more recently). 

However, it’s critical to separate subscription boxes like HelloFresh, Dollar Shave Club, and StitchFix from more purely product-discovery-oriented subscription boxes. Among this latter category, large players like FabFitFun and BirchBox dominate, while a host of smaller niche box companies continue to grow. 

Some would argue that many of these product-discovery boxes draw from buzzy DTC companies repetitively, making it impossible to subscribe to multiple boxes for fear of receiving the same Drunk Elephant face mask or Sugarfina champagne gummy bears. Ultimately some consumers may tire of receiving the same stale products in their subscription boxes, causing them to seek a more unique alternative to maintain the joy of unboxing. 

Solution

OuiPlease is a French-focused product subscription box shipping bi-monthly to customers in the US and Canada. OuiPlease subscribers, primarily women, receive eight full-size French products across apparel, accessories, beauty, home goods, food, and more. 

OuiPlease’s key competitive advantage is that its products are sourced directly from France and, in 98% of cases, are otherwise unavailable in the US and Canada. Products are shipped via bi-monthly subscription boxes, but OuiPlease also offers on-site e-commerce where customers can purchase a la carte products directly. 

With an annual subscription, OuiPlease boxes are priced at $108 per box; single-box purchases are $165 each. OuiPlease reports that each box totals around $300 in retail value, providing more than 50% savings to OuiPlease annual subscribers. 

Since launch in 2014, OuiPlease has shipped over 40,000 boxes, with a 92% customer retention rate. The company generated $350,000 in revenue in 2018 and reported just over $450,000 in revenue for 2019. 

Team

Founder and CEO Jessica Barouche is a Paris native with 10+ years of experience in global marketing strategy, specifically in distributing French products to the US market. Barouche moved to the United States from France in 2012 and launched OuiPlease two years later to share French products with US women. 

Barouche is supported by four additional team members, including two marketing and communications leads (one a consultant working 20 hours/week), a customer service manager, and a junior marketing associate. 

Growth Plan

OuiPlease doesn’t provide specific growth plans in their raise materials, but presumably, a large portion of raised capital will be devoted to user acquisition via paid marketing (a key component of growth for most subscription box businesses). 

The Rating: Underweight

OuiPlease enters a crowded subscription box market, but does have a definitive competitive advantage: the company sources products that are not otherwise available in the US, filling a specific niche for francophile, luxury-obsessed women. OuiPlease’s founder, Jessica Barouche, is a French native and has proprietary connections to French suppliers and a unique understanding of how to market French products to Americans, a strategic advantage for the company’s growth. 

The subscription box market is a crowded one, but success stories do exist. FabFitFun is arguably the most popular subscription box company to date. In 2019 FabFitFun raised an $80M Series A round led by top venture firm Kleiner Perkins, a round spurred by the company’s report of $200 million in revenue and one million members. However, other subscription box companies have stumbled: BirchBox struggled to find a buyer, and ultimately received a “lifeline” from an existing investor to continue operations. Partially because the subscription box industry is young, there are no notable exits to report, and projecting exit scenarios for OuiPlease is difficult. 

Furthermore, potential investors should account for the inherent risks of subscription box businesses. Harvard Business Review journalists reported on some analysts’ declaration that subscription boxes business are “in the midst of a venture capital-fueled bubble,” arguing that the subscription box market is saturated, the total market size for each individual business is small, that subscription boxes may be a fad, and user acquisition drives losses while scale is difficult to achieve. OuiPlease even acknowledges these challenges in its pitch materials, recognizing that with two to three thousand subscription boxes out there, it can be difficult to stand out. 

OuiPlease displays some signals that indicate the company could carve out a valuable niche in the subscription box space. OuiPlease focuses on luxury products, specifically from France; the company’s founder is French and uniquely capable of sourcing and importing these unique finds. OuiPlease also sells products via its website, capturing additional revenue on top of box subscriptions. However, the subscription box industry is volatile and crowded, and exit potential is minimal. Therefore, OuiPlease is an Underweight deal.