How D2C Brand The Ayurveda Co. Grew Its Customer Base 10X In Just 2 Years 

With consumer preferences experiencing a significant shift, the popularity of ayurvedic products has been steadily rising, particularly in the beauty and personal care industry. The Indian herbal cosmetics market is expected to reach $4.7 Bn by 2026. Launched in 2021 by Shreedha Singh and Param Bhargava, a Gurugram-based D2C brand, The Ayurveda Co. (T.A.C) is looking at ruling this space and emerging profitable by the next financial year.

However, the journey of this D2C beauty and personal care brand has not been without twists and turns. Suffering severe skin allergies in 2014, Singh started looking for remedies and her search led her to Ayurveda, which healed her within six months. It was then the idea of floating an Ayurvedic brand first flickered in her head.

After years of research, the founders, Singh and Bhargava, started building The Ayurveda Co. However, much to their chagrin, the husband-wife duo witnessed a lot of scepticism along the way. Despite this, the couple remained hell-bent on changing the perception around Ayurveda as a remedy that takes time to show effects and is now old and obsolete.

To change people’s perception around the 5,000 years old science of healing, the couple made it a mission to make their brand appealing and affordable for all age groups. Thus, The Ayurveda Co. was born, giving Ayurveda direct entry into the lives of people who have now largely separated themselves from its benefits.

Presently, the D2C brand offers a diverse range of natural and ayurvedic beauty and personal care products such as face washes, cleansers, serums, moisturisers, hair care products, and makeup. All products are made from ayurvedic ingredients, which are clinically proven and derma tested for being free from sulphates, parabens, and other harmful chemicals.

T.A.C sells its products through its website and its kiosks, along with select retailers and online marketplaces like Nykaa and Amazon. The startup displays and sells its products at 30 departmental stores in Dubai, which it plans to scale up to 300 this year.

In India, The Ayurveda Co. has 20 exclusive outlets, while its products are available across 3,000-plus multibrand outlets across the country.

In terms of its financial performance, the D2C brand claims to have witnessed 4X revenue growth in FY23 to INR 45 Cr from INR 12 Cr in FY22. This growth can be attributed to the significant expansion of their customer base, which has grown 10X over the last two years, from just a few thousand individuals to an impressive 5 Lakh customers.

In FY24, the founders aim to generate revenues to the tune of INR 150 Cr. To fuel this, the D2C brand recently raised INR 100 Cr in a Series A round.

Brand Positioning Is Most Critical In The Early Days

For T.A.C, establishing trust and fostering brand recall with customers was paramount. As a D2C brand centred around traditional Ayurveda, it was crucial to align with the preferences of millennials and GenZ. To achieve this, Singh personally oversaw surveys and managed customer care, as the sole point of contact, during the initial 15-18 months.

The founders also realised that for T.A.C to truly disrupt the market, a shift in perception around using ayurvedic products was essential, and the young generation must spearhead this transformation.

“Listening to the customers helped us understand the core proposition we can offer. While Ayurveda is traditional, we positioned ourselves as a young and modern brand,” Singh added.

Unlocking The Omnichannel Route With Beauty Advisors (The ‘Snipers’) 

T.A.C targets individuals between 18 and 35 years of age. Among them, customers in the age group of 18 to 25 years buy mostly from online channels. This is why the brand was only selling online in 2021 and 2022 via its website and marketplaces such as Amazon, Nykaa, Flipkart, and Blinkit, and with the help of influencers on Instagram.

However, the founders soon realised that the TAM they were targeting was too small. As a result, in May 2022, the T.A.C team embarked on their offline journey to expand their market share. However, there were quite a few unforeseen challenges.

“To go offline, we first went to stores like Nykaa and Shoppers Stop, however, they demanded a 50% margin on our products and a monthly display rental of INR 20,000. It was a huge cost to bear,” Bhargava said.

This paved the way for three key strategies that the founders adopted: 

Setting Up An Experienced Team

The founders appointed a team of sales executives from companies such as  L’Oreal, HUL, ColorBar, Biotene, and Lotus, Colgate, and Palmer. The new team was experienced in offline strategies like sachet-size products, smaller price points, and larger distribution, giving the brand a much-needed penetration boost.

Exclusive Stores

Instead of putting the products directly on the shelves of retailers, the founders focussed on opening their exclusive stores in areas with heavy footfall. This not only created a buzz in the market but also helped them negotiate better deals with retailers as the brand name was already built.

Training ‘Snipers’ In-House

The founders also decided to appoint beauty advisors (BAs) and gave them training to help customers choose the right products according to their skin type and requirements.

“It’s a very sniper kind of approach. And for our teams to become proper ayurvedic snipers, we kept on brushing up their skills. Today, we have 20-plus T.A.C exclusive stores and 3,000-plus offline retail touch points across India, along with more than 600 beauty advisors building brand awareness and trust among consumers,” Singh added.

Quality Conscious Super Supply Chains

Speaking with Inc42, Bhargava highlighted the importance of supply chains for global expansion. He also cautioned founders against compromising product quality during business growth.

“T.A.C’s success can be attributed to three key strategies — Maintaining an in-house R&D team of doctors and experts; sourcing high-quality ingredients from the Himalayan region through partnerships with key retailers; and investing in machinery and quality checks at outsourced manufacturing units to ensure product excellence,” the cofounder said.

Although The Ayurveda Co. outsources its manufacturing, the founders are laser-focussed on investing in machines and quality-control processes at regular intervals. This allows them to stay abreast of new technologies. Also, the D2C brand’s quality-control teams make sure that their vendors are committed to maintaining high quality.

“Also, we are the first of the few brands that have been able to enter the Middle East in less than six months after completing all formalities. We were able to get the products approved and on the shelves in Dubai because we have been focussed on building a super supply chain that is quality conscious and scalable,” Bhargava added.

Is Profitability A Distant Dream?

In the financial year 2021-22, the D2C brand’s total expenses amounted to INR 16.6 Cr, resulting in a net loss of INR 2.7 Cr. Although the founders didn’t disclose the total expenses incurred in FY23, they could increase significantly due to a 4X rise in revenues and a strong focus on marketing and brand promotion. It is pertinent to mention here that T.A.C also serves as the title sponsor for reality shows like MTV Roadies and Splitsvilla.

However, according to Bhargava, these expenses are important for the growth of the company. He claims that the company maintains a positive contribution margin.

“We are investing in promotion and marketing and not incurring losses here. The losses primarily stem from our distribution and operations side as we work with an in-house team of 600+ beauty advisors engaged in direct selling with attached incentives. So, the losses are not on the selling side and we expect to recover with scale,” he added.

Interestingly, even though the primary goal of the founders is to thoroughly explore the beauty and personal care market by adding more products and categories to their portfolio, they have no plans to set up a manufacturing unit.

Meanwhile, the husband-wife duo are planning to make inroads into the health and wellness markets. The founders are looking to break even by the end of FY24 and turn profitable by FY25.

However, the segment which The Ayurveda Co. aims to become the leader in requires high cash burn and is crowded with deep-pocketed players. According to Inc42 data, there are approximately 130+ beauty, personal care, cosmetics and men’s grooming D2C brands in India.

Some of the notable names in this segment are Mamaearth, The Moms Co., mCaffeine, Biotique Nykaa, Sugar, Mamaearth, Wow Skin Science, JustHerbs, The ManCompany, MyGlamm, Skinkraft, Plum, and Beardo, among others.

While Nykaa has already become a listed beauty marketplace, others like Mamaearth, Wow Skin Science, Bombay Shaving Company, mCaffeine, MyGlamm have already established presence in many international markets. Therefore, it would be interesting to witness how The Ayurveda Co. cracks the profitability code by FY25 with its ayurvedic playbook and well-trained beauty ‘snipers’.

[Edited by Shishir Parasher]

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