In March, I somehow became a feminist and am tempted to write something on women but meant for everyone. Last year my article “Abla Nari Maha Sanskari- Is our culture detrimental to women empowerment?” was read and praised by many, both men and women. No, I am not a feminist or woman activist, but I love to remind everyone about gender equality and the achievements of women, especially in the month of Women’s Day. So, this year I thought to write about the creations of three famous women entrepreneurs- Falguni Nayar, Ghazal Alagh, and Vineeta Singh. Three very successful businesswomen bagged tons of accolades for the sustainable brands Nykaa, Mamaearth and Sugar cosmetics which are created with a motto to make every simple woman unique and extraordinary.
Nykaa, Sugar Cosmetics, and Mamaearth are three leading brands in Beauty and Personal care (BPC), an industry of $15bn and booming at a CAGR of 10%. The Indian BPC market has seen a radical shift in consumer demand from chemical to natural base products. Organic, vegan, toxin-free, beauty and skin care products considered once upon a time a fad, sold in a niche market have transformed into a mass market. Among the three, Nykaa is at the forefront in terms of valuation with a value of $8.3 bn (in June 2022), followed by Mamaearth at $2bn (FY 2022) and Sugar at $26.85 mn (FY 2022).
BPC Industry, the recent trends, and the Covid pandemic
Changing lifestyles, a higher percentage of women in the workforce, a growing economy, rapid urbanisation, and rising self-awareness contributed to significant growth in the beauty and cosmetics industry. The affordability, dominating youth in Indian demography, obsession with beauty, media and publicity, and the accessibility of regional, national, and global brands have acted together to boost the Indian cosmetic market to greater heights. In terms of revenue generation, India is ranked fourth in the global cosmetic market. Surprisingly though, it is one-fifth of China’s BPC market despite the same demographic composition (Euromonitor). There is still a huge untapped market to cater to the needs of the masses as the cosmetic industry is no longer confined to only women or young people. Rather beauty has become a priority for both genders and for rich and poor. Beauty consciousness, environmental concerns, and Government’s “Make in India” promotion influenced as catalysts for a shift in consumer behaviour. There is a growing demand for natural, chemical-free skin and hair care products that are not tested on animals and are ethically sourced, produced, and packaged.
Organic, paraben-free, sulphate-free, no harmful chemicals, natural ingredients, and ayurveda are a few common terminologies used heavily in the production and promotion of BPC products. Restricted movement of consumers and the disrupted supply chain during the pandemic pushed the retail sector to expand into online space drastically. The setback caused by the pandemic made consumers realise the importance of the environment and the demand for clean beauty products has surged.
Nykaa, Mamaearth, and Sugar cosmetics- at a glance
Falguni Nayar, a successful ex-banker of Kotak, founded the brand Nykaa in 2012 as a beauty retail company that sells cosmetics and fashion products. She realised that the beauty cosmetic market of India was not at par with countries like France or Japan. Though there was huge market demand but in many parts of the country, the products were unavailable. Nykaa was launched as online retail but later moved to omnichannel presence. Within a short span of time, Nykaa has established itself as a leading player in the BPC industry with a current growth of CAGR of 6.32%. In the same year, Vineeta Singh an IIT Madras and IIM Ahmedabad alumni, an ultramarathon runner launched Sugar Cosmetics devoted to producing colour cosmetics suited for Indian skin tones. Sugar cosmetics is a well-known brand now, an online supplier of paraben-free natural cosmetics and as one of the fastest-growing premium cosmetic companies. A few years later in 2016, the new parents Ghazal Alagh and Varun Alagh launched Mamaearth offering toxin-free baby products safe by international standards. Last year, the company bagged the status of the first Indian D2C unicorn company having 140 natural products in its SKUs for all age groups and available in more than 700 cities.
What is common in the three brands?
The recent pandemic has acted as a booster for the growth of all three companies and they witnessed growth due to omnichannel sales and captured the market through D2C and traditional offline stores. There are similarities in the business models, target market, product mantras and in promotional strategies.
D2C Model and Omnichannel presence
The Inc42 report states that the D2C segment is estimated to touch $100 bn in 2025 and the BPC sub-segment is about to grow at a CAGR of 21%. Due to the pandemic, Mamaearth opted to sell the products through digital mode and initially started with the website. The D2C model saved the company in lockdown and once the e-commerce opened, it managed to use both online and offline operations. Constant engagement with consumers through digital media leveraged the company to constantly innovate as per customers’ demands. Sugar cosmetics too sells its product through the D2C model. It was able to reach an Rs100 Crore revenue with the help of omnichannel presences, selling through its app, website, 40k retails and renowned e-commerce like Amazon, Flipkart, Nykaa and Myntra. Nykaa started as a D2C brand and sells more than 2400 brands through its app, website and more than 120 offline retail stores. The brand operates as an inventory-based business model.
AI, AR, VR based digital experiences
Technology dominance and the adoption of the latest technologies like Artificial Intelligence, Augmented reality, and Virtual reality in the BPC industry, made companies create superior personalised experiences and met the diversified demands of customers. Nykaa relies heavily on digital promotions and uses diverse social media engagements. Youtube marketing, and content marketing enable the brand to reach the right customers with the right products. Sugar Cosmetics is recognized as a true digital native and created awareness with continuous engagement through blogs, content marketing and rigorous analysis of customers’ feedback. It is very successful in creating visual identity in the digital medium and grabbing the attention of consumers while scrolling their mobile phones through its innovative eye-catching designs. Mamaearth has a solid online presence and is very successful in creating brand awareness through digital promotions namely “Plant goodness” and “Plastic positivity”.
Influencer Marketing
These emerging brands relied heavily on influencer marketing to promote the products and connect with consumers more credibly. Ghazal used to spend a lot of time with other new moms to identify their satisfaction/dissatisfaction with the products of Mamaearth. Mamaearth gained brand familiarity and built loyalty through Youtube vloggers and Instagram influencers and especially mom bloggers who spread brand awareness. Sugar cosmetics’ approach to influencer marketing was slightly different. According to Vineeta, using famous influencers who promote today one brand and tomorrow another is not a great idea to gain the confidence of discerning consumers. Rather the brand engaged and promoted through more than 1000 small influencers who genuinely love Sugar products. The brand leveraged through regional influencers, promotions through regional languages and some new-age social media like Share Chat, Mauj, and Chingari along with Youtube and Instagram. Nykaa collaborated with influencers who are aligned with the ethos of the brand and maintained a long-term partnership with them. Deliberately it worked with more female influencers for beauty products and easily connected the brand with target customers.
Core Products- Launched as organic, harmful chemical-free products the brands quickly captured the attention of millennials and zoomers. Mamaearth was prized as Asia’s first brand with a Made-safe certification. Sugar cosmetics has grown its popularity not only in India but throughout the world as an online supplier of natural cosmetics. Nykaa, an e-commerce company specialising in sales of beauty, cosmetics and fashion products is very focused from day one to deliver quality products from its own brands and its partner’s brands. Sugar has also impressed customers through its unique “thumb-stopping strategies.”
“If I have the ability to make a difference, I am powerful” stated Ghazal in an interview after Mamaearth was recognized as a Unicorn venture in August 2022. These three inspiring entrepreneurs made a difference when they chose to walk on the risky path of venturing into new startups leaving the so-called settled option, the safe full-time fabulous career. Being working mothers, they juggled between work and family responsibilities and created three fantastic sustainable brands for women. The self-made female billionaires stayed strong in a tough time and proved that age, gender, background, or education nothing can be a bar if you set your mind to do something and go for it.