Mamaearth IPO: Honasa Consumer To Focus On Driving Up Revenue From Offline Channels

The revenue from offline channels across all brands of IPO-bound Honasa Consumer Limited, the parent of D2C beauty brand Mamaearth, stood at 35.39% of the revenue from operations during the six-months period ended September 30, 2022.

The startup earned INR 255.8 Cr from offline channels during the period, while its operating revenue stood at INR 722.7 Cr, as per the draft red herring prospectus (DRHP) filed by Honasa Consumer with the Securities and Exchange Board of India (SEBI).

“Going forward, we intend to continue to grow our share of business from the offline channel,” the company said, adding that the expansion will help improve its overall margin profile as the sale of beauty and personal care (BPC) products through offline channels tends to be more profitable.

The share of revenue from offline channels increased to 28.87% in FY22 from 9.06% in FY20, as per the DRHP, translating to a 27X growth during the period. 

As per the DRHP, its operating revenue in FY20, FY21, and FY22 stood at INR 109.8 Cr, INR 460 Cr, and INR 943.5 Cr, respectively, which implies growth at a CAGR of 193.15% between FY20 and FY22.

In FY22, 70% of its total sales came from online channels and the rest 30% from offline channels. Besides its own website, the startup also sells its products through ecommerce portals like Flipkart and Amazon.

It achieved profitability in FY22 and reported a net profit of INR 14.4 Cr in the fiscal year as against a net loss of INR 1,332.2 Cr in FY21.

Honasa Consumer said it intends to focus on increasing sales from its present outlets in the medium term by developing relevant consumer and retailer loyalty and engagement programs. Besides, it also aims to grow its store footprint by adding new high-value retail outlets across Indian cities and towns.

It is also looking to enter new categories and intends to continue expanding its portfolio across the full spectrum of BPC categories by further penetrating into categories like color cosmetics and fragrances. 

The company said it has been able to reduce the time to launch new products, which resulted in it having 159 and 225 SKUs in the BPC market in India during FY22 and the six months period ending September 30, 2022, respectively, which contributed to a 42.17% and 44.12% absolute increase in revenue from operations during the periods, respectively, as compared to the preceding corresponding period. 

Founded in 2016, Honasa Consumer started as a babycare brand and later pivoted its focus to the core beauty and skincare products segment. It sells its hair care, skincare, and makeup products under the brands Mamaearth, and owns other brands including BBlunt, The Derma Co, and Ayuga.

The startup competes with prominent players including WoW Skin, The Moms Co, Plum, and mCaffeine.