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Beauty Is A Beast

Beauty Is A Beast

Nykaa’s public listing and MyGlamm’s unicorn run signals a new phase in India’s D2C beauty segment

Beauty never stops. Just look at the spate of incumbent, emerging and new players in India’s beauty and personal care market!

So this week, we look at why there are dozens and dozens of Indian startups and brands competing for a slice of the beauty pie, and yet many more joining them as we write this.

But, first, have you read these two stories?

  • 💅Good Times For MyGlamm! Good Glamm Group is the latest unicorn in India, and the first from the beauty segment
  • 🍾Big Win For Nykaa IPO Investors…The beauty giant had a stellar listing; its stock was priced at INR 2208.35 at 3:45 PM on day one, a near 100% premium on the issue price of INR 1,125

🪞The Great D2C Beauty Makeover

When it comes to beauty, there’s always room for one more — it could be one more private label, one more variant, one more brand or one more company.  And that perhaps is the beauty of it all — that’s the last beauty pun, we promise 😛

Coming Of Age: Nykaa’s public listing as well as Amazon-backed MyGlamm’s entry into the unicorn club signals a new phase in the D2C beauty segment. The irony is that both Nykaa and MyGlamm (Good Glamm Group) are taking the house of brands approach, which is a page out of the FMCG playbook.

Chasing these companies are the likes of Purplle (valued at close to $450 Mn), Mumbai-based SUGAR Cosmetics, Mamaearth, Plum, WOW Skin Science and others. Overall, Indian startups operating in the beauty-cosmetics-personal care segment have raised close to $700 Mn between 2014 and April 2021.

Interestingly, the largest companies are the ones that have multiple brands under their umbrella, which results in delayed profitability.

Raking In The Moolah: Although traditional players still dominate the overall market, new-age D2C companies are giving them a run for their money by leveraging social media and influencer marketing, as well as the rising online shopper base.

For instance, while Revlon and Lotus took around 20 years to reach the INR 100 Cr revenue mark, Mamaearth and SUGAR took just four years to reach that milestone.

It has also forced legacy FMCG makers such as Emami and Marico to invest in companies such as The Man Company and Beardo, both male grooming startups disrupting the status quo.

👑 Content Is King! The likes of Purplle, Nykaa, SUGAR, and MyGlamm have invested heavily into content and this is where they are pulling ahead of traditional brands. The ecommerce game, particularly within beauty, has become a game of grabbing consumers through content.

Tellingly, MyGlamm’s first acquisition was content platform POPxo, and according to a Jefferies Research report from May, Nykaa alone generates 10%-15% of all Indian beauty content on YouTube.

Analysts believe that as a category, beauty is more suited to content-led engagement and commerce, given the higher emphasis on showing the end results and educating consumers on newer applications and products.

With the emergence of Thrasio-like platforms, beauty brands that best leverage content and social media are likely to see greater exit opportunities. GlobalBees, for instance, acquired millennial focussed skin-care Prolixr last month, and plenty of other platforms are also gearing up to acquire beauty brands in this age of D2C.

Catching The 💤

A good night’s sleep is sometimes all you need to look your best. There’s a reason they call it beauty sleep, and these startups are ensuring that Indians move on from the traditional to the latest sleep technology.

D2C Discovery: Binks 👗

While online fashion is fast and trendy, there’s just something more elegant about tailor-made outfits! Binks is looking to connect women with the tailoring community for custom-made everyday, festive and office wear. It was part of Inc42’s 30 Startups watchlist for October 2021.

The Idea: The Bengaluru-based startup offers tailor-made outfits without physical visits to the outlet or shop. Share the design you want along with your measurements, see the potential options with a design consultant on video, and finally, get the stitched clothes at your doorstep. The clothes are stitched at Binks’ central production facility.

The Trust Problem: Many women shy away from visiting tailors because of a trust issue. Looking to solve this, Binks employs an all-women team of designers and support staff to build trust and confidence among its customers.

The Model: Binks only has operations in Bengaluru right now, but plans to launch in five major cities by FY22. Its product line features more than 21 categories, from jackets to ready-to-wear sarees, priced between INR 1,000 and INR 3,000.

D2C Buzz In India

  • 🐶Here’s To More Happy Pets… Last week, we raved about pet care, and on cue, veggie dog treats maker Dogsee Chew raised $7 Mn to scale up
  • 💍 GlobalBees Buzz! The Thrasio-like platform has snapped up jewellery brand Yellow Chimes and home care startup Absorbia
  • 🧴 Wellness Boost! Mosaic Wellness has raised $24 Mn to expand its lineup of men’s and women’s health and hygiene products
  • ⌚ Catching Up With Tech! How D2C electronics brand Hammer has taken a page out of fast fashion to make inroads into the wearables market
  • 🏡Decked Up Homes! Interiors and decor brand Wallmantra has raised undisclosed funding from revenue-based financier Velocity

Global D2C Trendsetters

  • 💵Jessica Alba’s LA-based lifestyle brand The Honest Co has filed for an IPO and will be looking to sell $100 Mn worth of shares
  • 🛍️Indonesia’s Hypefast came out of stealth mode this week, and claimed to be Southeast Asia’s largest house of D2C brands, with a portfolio of more than 25 brands

That’s all for this week, folks…