WOW Skin Slips Into Red, Reports Loss Of Over INR 8 Cr In FY21

WOW Skin Science Slips Into Red, Reports Loss Of Over INR 8 Cr In FY21

SUMMARY

The rise in WOW Skin Science’s expenses outpaced the growth in its revenue, resulting in a loss in FY21 as against a profit of INR 9 Lakh in FY20

The startup’s expenses jumped about 17X to INR 108.6 Cr, while its total revenue rose 15X to INR 100 Cr in FY21

WOW Skin Science is an omnichannel D2C brand, offering 300 SKUs across categories such as skin, hair, bath, among others

Bengaluru-based D2C skincare brand WOW Skin Science reported a loss of INR 8.8 Cr in financial year 2020-21 (FY21) as against a profit of INR 9 Lakh in FY20 as the growth in its expenses outpaced the rise in revenue.

In FY21, the startup’s expenses jumped about 17X year-on-year to INR 108.6 Cr, while its total revenue grew 15X to INR 100 Cr, according to regulatory filing by its parent company Body Cupid Private Limited.

In FY20, WOW Skin Science’s total revenue and expenses were almost the same, at INR 6.5 Cr and INR 6.4 Cr, respectively.

Expenses for the purchase of traded goods were the biggest contributor to WOW Skin Science’s total expenses at 64%. It rose 18X YoY to INR 69.4 Cr in FY21.

The startup’s advertising and marketing expenses also shot up about 17-fold in FY21 to INR 43.9 Cr from INR 2.6 Cr in the previous fiscal year.

A spike in freight and forwarding charges was another major contributor to the higher expenses. The charges increased to INR 14 Cr in FY21 from INR 15 Lakh in FY20.

The sharp increase in promotional and logistic expenses led to the spike in the startup’s other expenses, which stood at INR 70.3 Cr as against INR 3.1 Cr in FY20.

The startup’s other expenses also include its warehouse maintenance charges, contract labour charges, legal and professional fees, among others.

Inc42 reached out to WOW Skin Science seeking comments on its business performance in FY21, but the startup refused to comment.

Manish Chowdhary and Karan Chowdhary founded WOW Skin Science in 2014. It works as an omnichannel D2C brand, offering 300 SKUs across categories such as skin, hair, bath and body, wellness, and nutrition and health. Besides its own website, WOW Skin sells its products across ecommerce platforms such as Amazon, Nykaa, and Flipkart.

As per its website, WOW Skin Science’s products are also available at over 3,000 Walmart retail stores in the US.

Last month, reports said that Reliance Retail was in late-stage talks to acquire the startup. Earlier this month, WOW Skin Science announced raising INR 375 Cr from Singapore’s sovereign wealth fund GIC.

Earlier, the startup had raised funding of $50 Mn from India-focused private equity firm ChrysCapital in April 2021.