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 is in the
emerging Internet economy.
Fantastic piece — Thompson makes a strong case that the seemingly unrelated creation of Amazon Web Services and YouTube a decade ago created the opportunity for Dollar Shave Club to disrupt a titan like Gillette.