The makeup market in India is one of the most rapidly growing industries and it is forecasted to grow at a CAGR of 9.6 percent from $1.2 billion in 2020 to $1.6 billion in 2025 (GlobalData Report). The recent IPO from Beauty marketplace Nykaa getting a phenomenal response, and beauty start-ups like Purplle, Myglam, Stayglad, etc. performing incredibly well are some of the major developments that have happened in the sector.
Given the rapid developments in the sector, it is a major task for a beauty start-up to differentiate oneself in the market to hold a strong consumer base. An e-commerce platform and beauty brand Recode Studios has been able to grow significantly over time by providing products at affordable prices compared to the market and by making various decisions that gave the brand a first-mover advantage in various areas.
“Our USP is our smudge-proof and water-proof products. Our products are more affordable than our peers. We sell our materials at good economical prices. Every product is authentic and authorized. The products are directly sourced from the manufacturers and the brand owners. We sell at even lower price than the others marketplaces,” said Dheeraj Bansal, Director, Recode Studios.
Recode Studios is the first business to debut matte neon eyeliners and colored mascaras in India, providing hues including shimmer blue, pink, and orange for people who like to make a big statement with their cosmetics.
The brand, which was founded in July 2018, started selling in December, and the sale of the first three months stood at Rs 21 lakh. For 2019-2020, the company’s sale was Rs 1 crore 90 lakh. For the next year, 2020-2021, it clocked Rs 5 crore 25 lakh. For the current year, the company has already clocked sales of Rs 16 crore 50 lakh (expected to clock about Rs 18 crore).
Recode Studios deals in a wide variety of cosmetics and skincare brands. From Wow Skin Science, Colorbar, Indulgeo Essentials, Power Gummies, Perenne Cosmetics, SKÖG Sweden, Zobha, Riyo Herbs, to Ofra and 40 more brands, the brand is offering a well-curated comprehensive selection of makeup, skincare, haircare, bath and body, grooming appliances, personal care, health and wellness categories from the most trusted brands.
Relying On Influencer Marketing During Covid
When there was a complete lockdown in the country for consecutive months, Recode Studios reconstructed itself by ditching the old conservative methods and established itself as an e-commerce platform by collaborating and inviting multiple brands to sell their products on its website and appl. Recode Studios has managed to grow 10-fold from its pre-lockdown numbers, reportedly.
“Recode infused a lot of money to the influencer market. The rest of the brands did not know how to handle the market. The company relied on the fact that a lot of people were at home busy on their smartphones and other gadgets. The reliance on the influencer during the pandemic helped the brand to get better visibility. Basically, Covid has actually benefitted the Recode,” Bansal stated.
"Overall, the company adopts 360-degree multiple marketing strategies. We started with Instagram, which was the brand’s only source of marketing. We are doing good on Google Adwords, Facebook ads, influencer ads," Bansal added. It is also working with Actor Swara Bhaskar.
Unique Business models
The company works with two business models - D2C (Direct-to-Consumer) and D2R (Direct-To-Retailers), which is not common in the current ecosystem.
Bansal stated: “In our business of Direct to Retailer, there is no distributor as a middleman. Recode directly goes to the shop-owners and presents its products and sells them. We don’t have any distributors with us.”
The company clocks 50 percent of its revenue from both D2C and D2R.
The brand's target audience includes anyone between the ages of 16 and 45, Category A, B, C cities and Metros, who are keen on exploring hues to compliment any outfit and boost their glam game, the company shared.
In terms of the logistics partners, the company has a single delivery partner Shiprocket to handle its D2C business as they get services of delivery, order-tracking, order cancellation, Whatsapp follow-up, etc. from the platform.
The company only sells on its own Recode marketplace. Besides, the brand holds expertise in handling the designs, production, and business management of cosmetic products across the globe, the company stated.
Currently, the brand has 150–170 retail outlets across India.
The company is currently working with the help of debt funding raised earlier. Based on the debt funding, the company is working to make the size of its business bigger and then may raise funds if needed. Currently, it is bootstrapped with 25 lakh interest-based funds raised from friends and families.
On March 01, the brand is opening its exclusive store in Chandigarh. And, in the next two years, it will be opening stores in Ludhiana, GK in New Delhi. It also plans to open more stores in airports and malls.
Its broader target is to build its presence in the South Indian market.
“Recode aims to become the nation’s one of the largest platforms selling multiple beauty and lifestyle brands and hence becoming a one-stop portal for all beauty products a customer can look for,” he concluded.