What A Beauty! 5 D2C Beauty & Skincare Brands Driving the Segment & Investors' Interest with Ease

Investors pumped in US $ 1.4 billion into the D2C brands between 2014 and 2020, of which 54% went into the beauty and fashion segment.
What A Beauty! 5 D2C Beauty & Skincare Brands Driving the Segment & Investors’ Interest with Ease

The year of the pandemic has had a drastic impact on the overall beauty and skincare industry and rightly so, the year 2020 was not even close to normal. The year has been all about modern branding, consumer experience, catering to consumer demands, and a shift towards D2C. The months during the Covid also shifted the focus of the beauty and skincare brands towards natural and organic products. The pandemic gave consumers a lot of time to re-evaluate their options and think before using any kind of cosmetics on their bodies.

People became more aware of the kind of ingredients used in their make-up and skincare products and this is gradually changing the industry as a whole with a number of homegrown brands offering goodness of local, natural, and organic products.

According to Avendus, the global beauty and personal care market is expected to touch US$ 725 billion by 2025 and the fledgling Indian market is expected to grow to $28 billion by then.

Furthermore, with people spending the majority of their time inside their homes, they are leaving their make-up behind and embracing natural skin, which has given a push to the skincare market more than the beauty segment. Currently, skincare is leading the way and in that, online retailers are growing by a heavy margin when compared to brick-and-mortar stores. In fact, with social media influencers engaging with today’s consumers about the slew of skincare products brands are offering, the segment is slated for definite growth.

Industries are changing, consumer behavior is changing, buying patterns are changing, the kind of products people are consuming today is changing, it comes as no surprise that the pandemic has subsequently put pressure on brands too to find newer ways to engage and sell to their consumers. And in line with this, the brands of today are getting more and more inclined towards D2C and this is the right way to go currently with digital acceleration happening across many channels. In fact, the homegrown D2C beauty and skincare brands are fast gaining popularity among investors in India.

A report by Praxis Global Alliance (PGA) Labs and Knowledge Capital maintained that investors pumped in US$ 1.4 billion into the D2C brands between 2014 and 2020, of which 54 percent went into the beauty and fashion segment. And the trend has continues well into 2021. Some of these beauty and skincare brands riding on the D2C wave are:

MyGlamm

MyGlamm

Omnichannel D2C beauty brand MyGlamm was founded in 2017 by Darpan Sanghvi and offers a wide range of over 800 vegan products across make-up, skincare, and personal care. The brand retails over 10,000 offline points of sales across 70 cities in India, besides online channels.

The beauty brand closed its Series C funding worth Rs 530 crore (about US $ 71.21 million) in July 2021, backed by a clutch of investors including Accel, Bessemer Venture Partners, Strides Ventures, Trifecta, and Wipro. MyGlamm will use the fresh capital to expand its offline footprint, fund working capital requirements, and support data science and technology research.

It had acquired women-centric content platform POPxo in August 2020 and will use a portion of the funds to broaden the content creation capabilities and digital reach of the platform.

This round has been raised in two tranches – a Rs 355 crore funding led by Accel along with participation from existing investors and a Rs 175 crore it had secured from Ascent Capital, Amazon, and Wipro in March. The company's valuation following the March 2021 round was at US$ 100  million (approx. Rs 740 crore).

The brand has brought onboard actor Shraddha Kapoor as a brand ambassador and investor, in June 2021.

For MyGlamm, around 98 percent of the online revenue comes from its own website and app and the remaining 2 percent from marketplaces.

SUGAR Cosmetics

SUGAR Cosmetics

SUGAR Cosmetics was launched by Vineeta Singh and Kaushik Mukherjee in 2015 to offer beauty products that were specifically created to suit Indian skin tones. It started as a D2C brand and while it still contributes to SUGAR cosmetics’ 50 percent revenue, it went on to add 2,500+ retail outlets across 130+ cities in order to build an omnichannel distribution network.

SUGAR Cosmetics also has a passionate fan base of more than two million women and gets over a million unique visitors every month on its own website and mobile app. The brand had started with just two products and later expanded its product portfolio to 550+ SKUs today and has now forayed into merchandise with the launch of SUGAR Merch Station earlier this year, which now extended with products like bags, wallets, umbrellas, tees, and caps; and will be available on the brand’s website and app exclusively.

SUGAR Cosmetics had secured a US $ 21 million Series C funding round led by Elevation Capital (formerly, SAIF Partners), with existing investors A91 Partners, India Quotient participating and strategic venture debt from Stride Ventures.

“With SUGAR’s 6x jump in revenue over the last two fiscal years, we are extremely grateful to all our customers who believe in our mission to make high-quality inclusive beauty accessible to everyone. While the COVID-19 disruption was a spanner in the works, we were quick to bounce back to 150 percent of our pre-Covid revenues last quarter, and that too profitably,” said Vineeta Singh.

Having closed FY20 at a net revenue of Rs 105 crore, the D2C brand is currently at an annual net revenue run rate of ~Rs 200 crore with the aim to double this in the next 12 months.

Mamaearth

Mamaearth

A part of Honasa Consumer Pvt Limited (HCPL), Mamaearth was founded by husband-wife duo Ghazal Alagh and Varun Alagh in 2016 as a toxin-free personal care brand for young, aspirational, and increasingly conscious Indian consumers.

The D2C brand, in a span of 4 years, created a product portfolio of 120+ products, has reached over 2.5 million customers in 11,000 pin-codes, and has already hit Rs 300 crore run rate in India. Besides, D2C, the brand also retails through marketplaces like Amazon, Nykaa, Flipkart, Myntra, and more. Mamaearth initiated its offline expansion in 2020 and is present across 70 cities in the country.

The brand closed the latest US$ 50 million round led by Sofina Ventures SA, a Belgian-based investment company, with participation from existing investor Sequoia Capital India too. Mamaearth is planning to deploy the funds to drive brand growth through aggressively expanding its offline distribution and explore inorganic growth opportunities in the beauty and personal care segment.

“With a vision to become a house of brands, the company is currently focusing on creating brands with millennial propositions with an internet-first approach. This round will help amplify the process and strengthen the D2C and offline expansion of Mamaearth, along with further accelerating the growth of The Derma Co. which is already showing early signs of success, since its launch in 2020. We will also be exploring inorganic growth opportunities in the beauty and personal care segment,” said Varun Alagh.

The latest round of funding has valued the brand at US$ 730 million.

WOW Skin Science

WOW Skin Science

Bengaluru-based personal care brand WOW Skin Science, under Fit & Glow, was launched in 2014 by two brother duos, Manish and Karan Chowdhury and Ashwin and Arvind Sokke. WOW Skin Science and WOW Life Science are two brands under the parent firm and are known for delivering advanced research-backed, nature-infused products, formulated with a high concentration of natural ingredients that help nourish skin, hair, and body and deliver visible results.

The WOW brands offer over 200 personal care and wellness products, which are sold through its own website and app and also marketplaces like Amazon, Flipkart, and Nykaa. Offline, the brand retails through more than 5,000 departmental stores and pharmacies across the country.

The brand prides itself on not only promoting all things natural but is not using any harsh chemicals, mineral oil, sulfates, parabens, or silicones in its products and creating every range based on customer feedback and a high degree of research and development activities.

The Bengaluru-based start-up registered a whopping 18 times jump in revenue over the last four years to Rs 340 crore in the financial year ending March 2020. The brand raised US$ 50 million ChrysCapital, in April 2021. WOW is working towards maintaining its growth momentum by capitalizing on its loyal customer base, expanding penetration across channels, and further developing its portfolio of brands and products.

Pilgrim

Pilgrim

Anurag Kedia and Gagandeep Makker launched Pilgrim in 2019 when they realized that while many Indians were aware of global beauty trends, they had limited access to the same brands and experience.

“Pilgrim makes borderless beauty experiences accessible and affordable. It brings together unique beauty and cultural traditions from around the world. It connects with the wanderlust spirit of a modern millennial, hence the name – Pilgrim. All of our products are FDA approved and free from toxins like parabens, sulfates, and mineral oils, which are otherwise commonly used in beauty products. Our range of products is 100 percent vegan, free of harmful toxins, and not tested on animals,” maintained Gagandeep Makker.

The homegrown D2C beauty and personal care brand currently offers 35 SKUs across hair, face, and bath-body and retails via multiple platforms including its own website. Pilgrim bets big on technological integration in the operations of the brand and uses AI-powered customer support chat which offers personalized suggestions.

The brand raised Rs 13 crore in Series A funding in June this year, led by Fireside Ventures, Rukam Capital, and founding teams of Boat, NoBroker, and the Founder-CEO of Bewakoof.com, with Dexter capital as the transaction advisor.

Within a year of launch, Pilgrim is witnessing an ARR of Rs 18 crore backed by innovation, R&D capabilities, and a disruptive supply chain. 
 

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