Great piece from Stratechery on Unilever’s acquisition of Dollar Shave Club. Thompson makes the case that the creation of Amazon Web Services and YouTube a decade ago created the opportunity for Dollar Shave Club to disrupt a giant like Gillette. I find it just as interesting to read about how P&G came (and tries to remain) in the dominant position.
Probably the most important fact when it comes to analyzing Unilever’s purchase of Dollar Shave Club is the $1 billion price: in the world of consumer packaged goods (CPG) it is shockingly low. After all, only eleven years ago Procter & Gamble (P&G) bought Gillette, the market leader in shaving,for a staggering $57 billion.
To be sure Gillette is still dominant — the brand controls 70 percent of the global blades and razors market — but there is little question that Dollar Shave Club is a much better deal, in every sense of the word. Understanding why Dollar Shave Club was cheap means understanding why its blades are cheap, and understanding that means understanding just how precarious the position of P&G specifically and incumbents generally are in the emerging Internet economy.