While we have been talking about the changes and losses and economic slowdown and closures caused by Covid-19 and the subsequent series of partial and complete lockdowns across the country and states, not all has to be this gloomy, afterall. The pandemic year witnessed a boom in the skincare and beauty segment while also revolutionising it in ways more than one. It brought a surge in the demand for natural and organic skincare and beauty products with consumers becoming ever more aware and conscious about the products they are using, the ingredients that are used in their making, their side-effects, etc. While many established brands in the segment are now moving towards sustainability with the launch of few eco-friendly or natural skincare products/ collections, the scenario is much better for newer, home grown brands that are born on the sidelines of sustainability and offer goodness of local, natural and organic ingredients in their products.
The factors leading to this rise in number of such brands is the availability of products by these home grown start-ups that suit Indian skin types and hair – a need that largely remained unfulfilled by international brands. Besides, the growing movement away from chemical to natural and Ayurveda-based products is also pushing these local companies. While it all started around 2015 when brands started coming up with paraben-free products and then sulphate-free and then ultimately 100% plant-derived ingredients, today it has become the need for brands to offer sustainable, eco-friendly and even vegan skincare options to an ever woke consumer base. According to Statista, revenue in natural cosmetics segment amounts to US $ 834.5 million in 2021 and the market is expected to grow annually by 7.83% (CAGR 2021-2025) and in relation to total population figures, per person revenues of US $ 0.60 are generated in 2021.
What & Why of Skin Pot
One of the home grown brands that relies on natural ingredients and is backed by science, is Skin Pot. Founded in 2020 by Anondeep Ganguly and Prabmehar Singh, Delhi-based start-up Skin Pot believes in a minimalist approach to skincare and develops hybrid products for women. Prabmehar Singh, Co-founder & Chief Financial Officer, Skin Pot, asserts, “The skincare industry has grown a lot over the years, especially during the lockdown. The pandemic saw a paradigm shift in buying patterns since people weren't going out much. The purchase of cosmetic products was swiftly dropping, while the actual skincare products were on the high rise as people had time to take care of their skin. Our brand journey started during the lockdown when we tried several Indian and international skincare brands to resolve enlarged pores and pigmentation. Anondeep's father Dr. Apurba Ganguly has been a scientist and a specialist in plant molecules, skin diagnosis, biomarkers and skin treatment for more than 40 years. He had a strong network of scientists, which helped us dive deep into the issue to find solutions to our skin problems. The journey was not easy, but here we are.”
The non-fragrant products by the brand are suitable for all skin types, unlike conventional beauty products and are formulated to restore the natural vitality and radiance of the skin. “Gen Zs like hybrid products because they imply value for money and a shift to reduced consumption. We have been seeing a push for multi-purpose products and ‘skinimalism’ and we want to ride this opportunity. We offer hybrid products like sleeping masks, sunscreen, collagen-boosting cream, face wash, etc., with active ingredients. These are all hybrid products that give you multiple benefits together. Our intense repair hydration serum has Vitamin C, multi-molecular and hyaluronic acid that hydrates your skin, brightens it and boosts your collagen. We are a digitally native brand and would continue to build this digitally, at least for the next year,” informs Anondeep Ganguly, Co-founder & chief Executive Offier, Skin Pot.
What goes on in the backend?
Skin Pot, as a brand, is all about natural ingredients and immense R&D backed by science and technology. Skin Pot’s products contain skin microbiota igniting technology with the help of plant stem cells that helps to ignite skin microbiomes leaving the user with healthy and radiant skin. “Our products target the root cause of many skin issues like eczema, acne, dry skin, even fine lines, and any UV damages caused due to the imbalance in skin microbiome. They help regenerate, repair, and protect skin by maintaining the skin microbiome. We also use a unique liposomal technology that helps to deliver identical skin molecules at the right skin levels. In terms of sourcing, 99% of our ingredients used in our products are imported from Spain, Germany, the USA and South Africa, and all of these are eco-certified, Cosmo-certified and have undergone various chemical studies. We don't use ingredients that do not have a clinical study,” asserts Anondeep Ganguly. Skin Pot has 40+ years of R&D experience with an evidence-based understanding of the scientists from Spain,
Besides offering intricately manufactured and produced skincare products, Skin Pot is focusing a great deal in on their tech stack. The brand understood the importance of technology very early and hence integrated a lot of data and analysis while making decisions. Prabmehar Singh avers, “Be it increasing our business, understanding our cohort, developing new products, customer feedback and business efficiency, I think technology is something that we integrated at our core to scale up our brand. CX is a key lever for all digital first brands and brands do not shy away from trying out new things, leveraging different technologies, investing in platforms anymore. Our IT team has helped us understand our customers’ needs, their journeys and fill the gaps. We have integrated several automated tools like Zoho, a few community-building platforms and data analysis tools too. These tools helped us crunch data and decipher our cohort more effectively. These investments in technology have indeed helped us drive a certain amount of growth.”
And in order to market the brand more prominently and effectively, Skin Pot aims to educate consumers on skin health and the significance of balancing the skin microbiome. “We use social media to communicate more about the USPs of the ingredients and educate customers on how hybrid products could be a better alternative to the 12-step Korean beauty regime. Almost 30 to 40% of our revenue goes into promotions as ours is a very nascent brand, and we feel that it requires a huge push at this point. As we advance, there will be a pull from the market because we emphasize a lot on quality and innovation. Still, at least we see that we will have to spend a lot on marketing and promotions in the next two years, which equals brand awareness for us. We also emphasize a lot on Instagram and Google because that's where our cohort lies,” maintains Anondeep Ganguly.
While natural skincare segment is on a high right now and are being preferred by consumers, D2C is what’s driving the market even further for brands in this category and in various other categories. According to an analysis, the Indian D2C market is expected to triple from US $ 33.1 billion in 2020 and touch US $ 100 billion by 2025 on the back of the projection that online shoppers in India will reach 350 million by FY25, up from 128 million in FY21, and there is no reason for Skin Pot to not leverage this potential market. Anondeep Ganguly says, “When you see the kind of transactions happening in the past couple of months, one can see the kind of growth D2C is wwitnessing in India. We feel that it is the right time to plug in a D2C skincare brand because gone are the days where companies felt that they could go ahead and sell anything in the market with huge ambassadors. Thanks to social media channels and internet penetration, people are more aware and conscious about their buying decisions.”
Anondeep Ganguly believes that hyper personalisation is going to rule the D2C world, however it will take a lot of time keeping the current circumstances in mind. The 100% D2C is only possible through personalisation or a subscription model, and he thinks that it will have a big impact on the beauty industry. However, subscription models seem to be a far-fetched dream right now and hence he advises fellow entrepreneurs to focus on formulation and invest heavily in building their brand. It is also imperative to pay full attention to technology integration right from the start to get its full benefits.
Challenges & way ahead
Even as the pandemic posed challenges on brands across categories, the right pivot strategies at the right time is what helped Skin Pot stay afloat while excelling in the category with its range of sustainable skincare products. “The pandemic was indeed a challenge to us. But we transformed it into an opportunity. We tried and tested if we could reduce our overhead cost and spend that overhead cost on brand awareness, which turned out to be more of an opportunity. Bootstrapped so far, we had invested around Rs 70 lakh in the start-up initially. We have an Annual Recurring Revenue (ARR) of Rs 1 crore. Going forward, given the kind of D2C growth, we are planning to explore the opportunity to collaborate with larger brands and jointly come out with new categories. Furthermore, we are also planning to integrate technology that would improve the customer experience online and offline, understand the cohort much better and effectively communicate with them. Content is something that is the first point of contact with our cohort, so taking it in the right direction is very important,” concludes Prabmehar Singh.