SUGAR Cosmetics’ Sales Jump 20% To Cross INR 500 Cr Mark

Beauty ecommerce brand Sugar Cosmetics’ sales surpassed the INR 500 Cr mark in the financial year 2023-24 (FY24) with more than a 20% jump on a year-on-year (YoY) basis.

The Vineeta Singh-led cosmetics brand posted INR 505.1 Cr in revenue versus INR 420.3 Cr in FY23. However, the increase was much lower compared to the significant 89% jump in sales last year.

SUGAR generates revenue by selling a range of cosmetics and beauty products – lipsticks, nail polishes, various makeup products, as well as skin care products such as moisturisers and sunscreens.

On the back of the growth in sales and improvement in margins, the startup’s net loss narrowed 11.3% to INR 67.6 Cr in FY24 from INR 76.2 Cr in the previous fiscal year. 

Husband-wife duo Singh and Kaushik Mukherjee founded SUGAR in 2015 as a D2C brand, with only an online platform. However, with omnichannel becoming the norm, the startup later followed the same model. Today, it claims to have a presence in over 45,000 retail stores across India.

Currently, India is the biggest market for the startup. Its global sales declined almost 46% YoY to INR 2.6 Cr during the year under review.

SUGAR last raised $50 Mn in its Series D funding round in 2022 from the Asia fund of L Catterton, A91 Partners, Elevation Capital and India Quotient. As per reports earlier this year, Malabar Investments was looking to buy some stake in the startup through a secondary deal of INR 80-100 Cr. However, there has been no confirmation on the deal yet.

Meanwhile, SUGAR is also eyeing an IPO in the next two to three years but is looking to turn profitable and hit INR 1,000 Cr plus revenue before going public, the cofounders told ET recently.

Where Did SUGAR Spend?

While the startup managed to bring down its spending in certain buckets, the total expenses increased 15.5% to INR 583.7 Cr in FY24 from INR 505.5 Cr in FY23. Ad expenses alone accounted for more than 27% of the total expenditure.

Ad & Sales Promotion Expenses: Despite ads and sales being the biggest expense, SUGAR saw a marginal decline under the head. It spent INR 161.6 Cr in FY24 on advertising and promotions as against INR 162.6 Cr in FY23.

Procurement Cost: The brand also brought down its spending towards the purchase of its cosmetic and beauty products by more than 27% YoY to INR 113.4 Cr in FY24.

Employee Cost: SUGAR’s employee benefit expenses increased to almost INR 70 Cr in the year under review from INR 60.8 Cr in FY23.

In that, it spent INR 62.4 Cr towards salaries and wages in FY24. ESOP expenses fell almost 30% YoY to INR 3.9 Cr during the year.

SUGAR competes with the likes of Mamaearth, Nykaa, and international players such as Maybelline and Loreal, among others, in the fast-growing Indian beauty and personal care segment.