Startups are forever launching with the promise to “disrupt” one market or another. Sometimes they actually do, but a very sound alternative strategy is to simply find a niche and be more efficient in a large, well established market. Alexej Pikovsky, CEO of Alphagreen Group, pursued the latter strategy with great success in the immense and varied health and wellness industry.
Pikovky, an athlete and health enthusiast, began his career in investment banking at Nomura before moving on to become a founding member of Delin Ventures, a venture capital arm investing in leading technology companies and VC funds. He acquired board-level experience as an investor for a large-cap private equity fund before founding Alphagreen in 2019.
We asked him a few questions about the health and wellness industry, finding a niche, and we 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 those you do buy?
Alexej Pikovsky: We incubate when we have a high degree of knowledge around the supply chain and have an established network of suppliers for the products we are looking to launch. We acquire brands when it is a complex supply chain or where we see great value in buying a profitable brand with excellent sales and a solid customer base.
GD: Health and wellness is, of course, an immense market but there are many big markets. What led you to focus on health and wellness?
Alexej Pikovsky: Health & wellness is a big passion of mine. I played water polo on a semi-professional level and both, me and my co-founder, are into healthy food and a healthy lifestyle. We initially looked into novel ingredients such as cannabis and CBD and built a marketplace around this space. The customer group on the marketplace was mainly interested in help with sleep, pain, and anxiety. Hence, we started looking into other ingredients and products and ultimately concluded that building a more extensive health & wellness brand group makes 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 an ample space, and focusing on certain sub-verticals is the key to success. We love niche supplements such as CBD, matcha, charcoal, functional mushrooms, specialist teas, and coffees. We also look at products specifically related to sleep, such as weighted blankets, eye masks, products around wellness such as scented candles and bath bombs. While we would not go for dumb bells, we might consider certain fitness products or neck massage devices. What is essential for us is to build an exciting portfolio of high-quality products to offer these products both on our own marketplace, direct to consumer, and via Amazon and other channels.
GD: What do you look for in a brand that you are considering for Alphagreen Group?
Alexej Pikovsky: We break down the process in detail via our ‘Sell your brand’ pages, but in short, we look for many excellent reviews that usually confirm the product’s quality. We look for profitable brands with an average order value of above £30 (about $41) and scope to do product bundling and upselling, as well as a subscription in the best case. The product should have the ability to scale internationally so we can plug it into our network of warehouses and distribution channels and scale it very quickly.
GD: What does Alphagreen offer those brands? What can they accomplish as part of the Alphagreen Group that they are unable to do alone?
Alexej Pikovsky: Alphagreen Group has been scaling its own brands for the last two years, and with our wholly-owned subsidiary nuoptima.com, we have scaled 15+ other consumer brands. Using the insights from our marketplace and working with other brands, we can scale much quicker with a very competitive cost structure and synergies from the brands we have built. The advantage of having an established distribution platform with various growth channels is a great asset where time is of the essence. A brand could achieve growth alone by raising capital and testing different growth channels. However, the advantage is our experience and access to funding. So with Alphagreen Group, growth can be achieved much faster.
GD: How does Alphagreen simplify the shopping experience for consumers?
Alexej Pikovsky: We have several growth channels. Our marketplace benefits from substantial organic traffic, so the shopping experience for the consumer usually starts by landing on a category, e.g., CBD gummies and then they are presented with the best selling CBD gummies. Personalized product recommendations will help the customer find other products they might like. Each page has a chatbox with our customer support available 24-7 if the customer requires advice.
Our incubated and acquired brands drive traffic primarily via Google Ads, Instagram, and Amazon when it comes to our incubated and acquired brands. Depending on the channel, the shopping experience starts at the respective platform, and the user then lands on the product page. The product page is optimized to convert the user smoothly with some potential upsells at the product checkout. Each customer can subscribe to our email list to get a discount and receive special offers from time to time.