Aarti Koya started her career in private equity working for Capvent, a $1 billion fund-of-funds based in Switzerland, with an investment focus on emerging markets in Asia, particularly India and China. As part of the co-investment strategy, she became heavily involved in investing and managing consumer businesses in the e-commerce space.
Her five-year stint (2010-2015) in China helped her gain significant insight and experience in the growth and life cycle of direct-to-consumer companies, Koya states. “So, when I came back to India and was asked by the Manipal Group to take over the running of EKAM and focus it as a predominantly direct-to-consumer brand, I could not resist the challenge and the opportunity to create something unique in the fragrance space in India,” says the CEO of EKAM.
Since she took over the brand in 2020, the business has grown from less than Rs 1 crore in annual sales to over Rs 12 crore annual run rate currently, she claims. She says that she is proud to have built a brand that is known for its product quality, customer service and innovativeness.
According to the India Fragrance (Perfume & Deodorant) Market Outlook, 2027, the fragrance industry is projected to cross Rs 20,000 crore by 2027. The demand for fragrance products has been driven by rising disposable income, growth in middle class population, increasing importance of personal grooming, emergence of working women, affordable price and the hot, humid and tropical climate conditions of India. Vini Cosmetics, Hindustan Unilever, ITC, Nivea India, Marico and McNroe are the market leaders in the organised fragrance market.
“However, the aromatherapy and air care market is also growing rapidly and this will enable EKAM to achieve Rs 1,000 crore revenue in the next five years. In addition, EKAM is also planning to launch a fine, highly beneficial personal care range by the end of this year,” Koya says.
“Fifty-five percent of our revenues stem from online, mostly from our own website. The remaining 45 percent of revenues are from retail stores, mostly specialty and cosmetic stores,” she adds.
Speaking about the key revenue drivers in this business, she explains that the Indian consumer is currently deprived of choice in perfumes and fragrances that are also affordable as most of the luxury brands are priced above Rs 3,000 which puts them out of reach of young millennial customers.
EKAM’s range of perfumes, body sprays and other aromatherapy products range from Rs 150 to Rs 1,400. “This makes them very affordable for everyday use,” she claims.
While the perfume market in India is currently white space, with very few players of size, this provides EKAM a great opportunity to grab substantial market share in a market that is growing at over 15% CAGR, she says. There have been a few new entrants in the space in recent times, but EKAM primarily looks at international luxury brands as its main competition and the startup’s goal is to take market share away from these brands. “As we are able to provide the same quality products, both in terms of ingredients and packaging, at much more affordable price points.”
Sponsored by The Manipal Group led by Gautham Pai, the startup took its first angel round of Rs 4.8 crore in June 2022, which was used to broaden the product portfolio and for building marketing collaterals.
Although EKAM is currently fundraising its next round of financing that will help double its current run rate, she admits as a female entrepreneur, it is much more difficult to fundraise.
“While EKAM has been lucky to be backed by some very marquee angel investors, I think there remains an inherent bias against female entrepreneurs. We see this play out in every field- where women first need to prove that they have the ambition and gumption before they are offered a seat at the table, even when they have the experience and the skillsets to get the job done.”
Believing that a woman’s approach to business is different from her male counterparts, Koya thinks female entrepreneurs and women in management roles in consumer companies can understand the exact pain points and address them better and quicker than their male counterparts. She is, however, surprised at how few women are involved in running consumer businesses right from product development to marketing.
“We are now seeing great proof that when women run businesses that cater to female customers, they can take them to amazing heights as can be seen from the success of Nykaa, Sugar, Mamaearth, etc.,” she emphasises. At EKAM, 50 percent of its workforce right up to the managerial level is female, she adds.
Pointing out that some challenges are unique to each gender, she does not think male entrepreneurs ever have to prove their commitment or ambition. “I do not think they are even able to fathom what I am articulating because they have never experienced it, but I am sure a lot of women will agree. Female entrepreneurs also need to learn the art of negotiating hard for their interests.” They are also more capable of creating a win-win situation for all stakeholders which is a much more sustainable way of building businesses, she adds.