Startups keep launching with the promise of “disrupting” one market or another. Sometimes that is indeed the case, but a very sensible alternative strategy is to simply find a niche and be more effective in a large, established market. Alexej Pikovsky, CEO of Alphagreen Group, has pursued the latter strategy with great success in the huge and varied health and wellness industry.
Pikovsky, an athlete and health enthusiast, began his career in investment banking at Nomura before becoming a founding member of Delin Ventures, a venture capital arm investing in leading technology companies and venture capital funds. . He gained board-level experience as an investor for a large-cap private equity fund before founding Alphagreen in 2019.
We asked her a few questions about the health and wellness industry, about finding a niche, and learned that people all over the world really want to relax and get a good night’s sleep.
GD: Alphagreen Group is a global acquisition and incubation platform. How do you decide which companies to buy and what is the incubation process for the ones you buy?
Alexej Pikovsky: We incubate when we have a high degree of supply chain knowledge and have an established network of suppliers for the products we are looking to launch. We acquire brands when it comes to a complex supply chain or when we see great value in buying a profitable brand with excellent sales and a strong customer base.
GD: Health and wellness is, of course, a huge market, but there are many big markets. What led you to focus on health and wellness?
Alexej Pikovsky: Health and wellness is one of my great passions. I played water polo at a semi-professional level and me and my co-founder love healthy eating and a healthy lifestyle. We first researched new ingredients such as cannabis and CBD and built a market around that space. The customer group in the market was mainly interested in sleep, pain and anxiety relief. As a result, we started looking at other ingredients and products and eventually concluded that building a larger group of health and wellness brands made a lot of sense.
GD: Health and wellness covers everything from exercise equipment to nutritional supplements to organic groceries. What type of products does Alphagreen offer consumers?
Alexej Pikovsky: Health and wellness is indeed a big space, and focusing on certain sub-verticals is key to success. We love niche supplements such as CBD, matcha, charcoal, functional mushrooms, specialty teas and coffees. We also look at products specifically related to sleep, such as weighted blankets, eye masks, wellness products such as scented candles and bath bombs. While we wouldn’t go for dumbbells, we might consider some fitness products or neck massagers. What is essential for us is to build an exciting portfolio of high quality products to offer these products both in our own market, directly to the consumer, and through Amazon and other channels.
GD: What do you look for in a brand you are considering for Alphagreen Group?
Alexej Pikovsky: We describe the process in detail via our “Sell Your Brand” pages, but in short, we’re looking for lots of great reviews that generally confirm the quality of the product. We are looking for profitable brands with an average order value above £30 (around $41) and the ability to bundle and sell products, as well as a subscription in the best case scenario. The product must have the ability to scale internationally so that we can connect it to our network of warehouses and distribution channels and scale it very quickly.
GD: What does Alphagreen offer these brands? What can they accomplish within the Alphagreen group that they cannot do alone?
Alexej Pikovsky: Alphagreen Group has been developing its own brands for two years, and together with our wholly owned subsidiary nuoptima.com, we have developed more than 15 other consumer brands. By using our market insights and working with other brands, we can scale much faster with a very competitive cost structure and synergies with the brands we have created. The advantage of having an established distribution platform with various growth channels is a great asset where time is of the essence. A brand can achieve growth on its own by raising capital and testing different growth channels. However, the advantage is our experience and access to finance. Thus, with Alphagreen Group, growth can be achieved much faster.
GD: How does Alphagreen simplify the consumer shopping experience?
Alexej Pikovsky: We have several growth channels. Our marketplace enjoys substantial organic traffic, so the consumer’s shopping experience usually starts by landing on a category, for example, CBD gummies, and then they are presented with top-selling CBD gummies. Personalized product recommendations will help the customer find other products they might like. Each page has a chat box with our customer support available 24/7 should the customer need advice.
Our incubated and acquired brands generate traffic primarily through Google Ads, Instagram and Amazon with respect to our incubated and acquired brands. Depending on the channel, the shopping experience begins on the respective platform, and the user then lands on the product page. The product page is optimized to convert the user smoothly with potential upsells at the product checkout. Every customer can subscribe to our mailing list to get a discount and receive special offers from time to time.