Sweet innings

By: |
November 22, 2021 6:59 AM

SUGAR Cosmetics is betting big on omnichannel retail

The colour cosmetics and personal care space is teeming with several brands starting their D2C journeys.The colour cosmetics and personal care space is teeming with several brands starting their D2C journeys.

The online-first beauty and personal care space has seen a flurry of activity recently. Nykaa just made its debut on the stock market, while MyGlamm turned unicorn in early November. SUGAR Cosmetics, which began operations in 2015, has expanded its business by adopting an omnichannel strategy, and adding a range of skincare products to strengthen its foothold in this growing market. According to Euromonitor International, India’s beauty and personal care industry was worth Rs 1.04 lakh crore in 2020. Of this, the colour cosmetics business was worth Rs 8,829.7 crore.

Omnichannel play

SUGAR Cosmetics targets the sub-35 women demographic and competes with brands like Revlon, Maybelline and Colorbar. In February 2021, the company raised $21 million in a Series C funding round. In FY21, the company clocked over Rs 130 crore in revenue, 30-40% more than FY20.

Having started out as a direct-to-consumer (D2C) brand selling online, SUGAR has now adopted an omnichannel strategy. “While nine out of 10 consumers discover our brand online, about half of our business comes from offline stores. Both these channels support each other. Consumers tend to test a product offline and purchase it online,” points out Vineeta Singh, CEO and co-founder, SUGAR Cosmetics.

The brand is present across 35,000 outlets in India, of which 10% are manned by the company’s own beauty advisors. Besides, it has more than 80 exclusive brand outlets, and plans to add about 20 more by the end of December, 2022. About 60% of the business the company generates is outside of metro cities. Singh says, going omnichannel has been instrumental in growing its market share.

The company’s marketing spends are also moving from digital media to traditional media in search of new consumers. Its advertising debuted on television after signing actor Tapsee Pannu as its first brand ambassador ahead of the festive season.

Kaushik Mukherjee, SUGAR’s co-founder and COO, says that the company’s business more than doubled in October 2021 over the same time last year. “We are observing growth from the face and skincare categories as people buy products like foundation, blushes, etc.”

Two years ago, the brand decided to consistently publish content on Instagram and YouTube around its products. Mukherjee says that this investment in educational content on make-up has helped the brand get visibility during the pandemic.

Broadening appeal

SUGAR Cosmetics has maintained that it does not offer deep discounts on its products. Mukherjee says that the brand is meant to be ‘aspirational’ in nature and, therefore, operates in the $8-10 price brand. But is it missing out on a market that wishes to pay less? “We have been considering making a play for a more affordable price point. We will run short-term experiments in that space,” he informs.

The colour cosmetics and personal care space is teeming with several brands starting their D2C journeys. To stand out, says Kartik Iyer, head, Publicis Commerce, India & Global Distributed Delivery, the brand must aim to upgrade loyal users and introduce low-priced or value packs to recruit new users. “SUGAR may need to look at expanding its current portfolio perhaps by way of acquisition.”

Some analysts caution, however, that D2C brands should be wary of dabbling in multiple categories. “While adding other categories is a good way to display the strength of the brand, it also confuses customers,” points out Shankar Shinde, COO, VMLY&R Commerce.

SUGAR Cosmetics, Mukherjee says, will “reserve the SUGAR brand name for products that are aimed at the aspirational Gen Z and millennial women”, while it experiments with other personal care categories.

Read Also: ZEEL unveils the second edition of #TVIsFamily campaign

Follow us on TwitterInstagramLinkedIn, Facebook

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

BrandWagon is now on Telegram. Click here to join our channel and stay updated with the latest brand news and updates.

Next Stories
1KFC India launches new campaign for its Express Pick-up service
2Lancer Capital acquires franchise in UAE T20 league
3Hotstar is the preferred choice for majority of the OTT viewers: Report