There has probably never been a better time to run a direct-to-consumer (D2C) beauty and personal care brand in India. Helped by the availability of cheap smartphones and the proliferation of the Internet, consumers are increasingly discovering a slew of new products and brands online, and are more than willing to experiment, boosting growth prospects of firms operating in the space. “Customers are now getting smarter and looking for better options,” says Aakash Anand, Founder & CEO, Bella Vita Organic — a three-year-old D2C beauty and skincare firm. Based in Gurgaon, the company caters to consumers in the age bracket of 18-35 years; the brand is not targeting the premium users, rather its positioning is very mass —explained by its pricing which stands in the range of ₹149-499. It gets the bulk of its customer traffic from Tier-II and III cities. “These are customers who are looking for quality products and well within their budgets,” says Anand, who claims that the company already clocks ₹100 crore in revenues annually. The plan is to expand beyond Tier-III towns once it hits a customer base of five million from the current two million.
To be sure, while D2C brands essentially refer to companies that directly reach consumers — via a mix of their own online and offline channels — most of them also have a presence on large e-commerce marketplaces like Amazon and Flipkart. The brands are typically digital-first; many of them have forayed into the offline space and are trying to build an omnichannel footprint. Where the D2C model is increasingly scoring over traditional marketplaces is that it facilitates direct interaction between users and brands, creating scope for product improvement, innovation and better customer experience.
Vegan clean beauty brand Plum recently opened its first exclusive brand store in Mumbai’s R-City mall. The launch is a part of the firm’s broader strategy to open more than 50 offline stores across the country by 2023. So far, the D2C brand has been present offline through a network of general and modern trade channels. The move to open exclusive brand outlets is an “attempt to take the brand experience to the next level. It also provides room for richer customer interaction,” Founder & CEO Shankar Prasad of Plum tells Fortune India. With the pandemic fuelling brand discovery by consumers via varied online platforms, the time is opportune for companies to cash in on the positive sentiment and build on their business growth. A lot of brands operating in the space are looking to expand their businesses by way of broadening their product portfolios, making relevant acquisitions and widening offline presence. The Good Glamm Group — which owns D2C beauty and personal care brand MyGlamm — for instance, recently acquired The Moms Co in an estimated ₹500 crore deal.
Plum — which lately entered into the haircare, makeup and men’s grooming segments — plans to add to their product range. “The acceleration (of the growth of D2C beauty space) has happened a lot in the last 18 months or so. Thanks to people spending a lot of time in front of their devices,” says Prasad, who believes that the market will grow manifold as and when the access to the Internet becomes even more democratised. For Bella Vita, nearly 65% of new customer addition happened through the course of the pandemic.
SkinKraft Laboratories is working towards expanding its online presence across Tier-II, III and IV markets. The brand claims to have seen a 100% year-on-year revenue growth at ₹155 crore in FY21. Co-founder & CEO Chaitanya Nallan of SkinKraft Lab says that the firm aims to triple its revenue growth over the next two years.
Soonicorn Mamaearth is banking on a strategy of acquisitions and offline expansion to power its growth. The brand is planning to add another 40,000 stores to its network of physical retail distribution, comprising general and modern trade channels over the next 12 months. Varun Alagh, Co-founder & CEO at Honasa Consumer, which owns Mamaearth, says the launch of exclusive brand stores is in a pilot stage and a decision of a broader roll-out will be taken later. “As a society, we are moving away from family-based consumption to individual consumption. People are becoming far more specific in their choices on personal care, creating space for a lot more D2C brands to come up,” tells Alagh.
