As young parents, Varun Alagh and Ghazal Alagh struggled with choosing safe and non-toxic products for their baby. It can be a cumbersome and confusing affair for most new parents and the Alaghs had it no different.
In 2016, after their son was born, they realised that most babycare products in India contained harmful chemicals such as parabens, phthalates, sulfates, bleach which can build toxicity in a baby’s body. These chemicals, when applied to sensitive areas of the skin can also cause rashes, irritation and skin allergy. Looking for safer alternatives, the Alaghs began ordering products from the US, but that naturally turned out to be more expensive and inconvenient.
And then they heard from other parents about the struggle and that was the start of Mamaearth.
In an attempt to offer products that are safe, cruelty-free and organic by international standards, Varun Alagh and Ghazal Alagh founded Honasa Consumer, which operates Mamaearth.
“We are a generation of Google parents,” said Ghazal, adding that parents Google everything before buying it — right from feeding bottles, shampoos to the paediatrician. It’s about being informed about what goes into the products and their specific ingredients. “After many rounds of qualitative research with millennial parents, we realised that there is a big gap in the demand and supply for toxin-free baby care products,” she added.
Thereafter, the duo began with their research to find the right ingredients and the right vendors. However, it was easier said than done. “Fortunately, the safe ingredients and vendors that we were looking for were readily available in India,” added Varun, saying this made the productization much more cost-effective.
Mamaearth’s Baby Steps: Identifying The Gap
Recalling the initial days, Varun said that one of the biggest challenges was to find manufacturing partners who were ready to work with their specified set of ingredients. The company claimed that all its ingredients were ‘Made Safe’ approved, an American organisation that gives non-toxic seals for everyday products.
“We set up a series of meetings with vendors across the country, only to face numerous rejections. But, we didn’t give up until we found the perfect partners, particularly those who were catering to export markets and had strong ISO, WHO and JNB certifications already,” said Mamearth’s cofounder, sharing the journey.
Currently, the company is backed by eminent investors including Sequoia India, Stellaris Ventures, Fireside Ventures, Marico’s Rishabh Mariwala, Snapdeal founders Kunal Bahl and Rohit Bansal, and Shilpa Shetty Kundra among other investors. Till date, it has raised a total funding of over $23.3 Mn.
Growing Beyond Baby Care For A Larger Pie
The Gurugram-based D2C brand began its journey with its native platform, as well as marketplace presence on Amazon and Flipkart among others. As the company began realising the potential of its products, it expanded to large-format retail stores such as Shoppers Stop, Central and standalone retail stores. “We are now present in more than 2000 stores across the country, but the majority of our business still comes from our own website,” he added.
In India, a lot of D2C brands are competing for the pie in the baby care segment and standing out is not easy. Besides Mamaearth, the likes of BabyChakra, The Moms Co, FirstCry among others are now competing with personal care giants like Johnson & Johnson, Himalaya, Sebamed, Hindustan Unilever, ITC among others. This has made this space one of the most active areas of development in the D2C segment and more and more brands are coming each month with specific niches and target areas, but Mamaearth is branching out beyond baby care to meet a larger addressable base.
“As time progressed, we realised that it wasn’t just the millennial parents, but the entire generation was seeking products that are safe for them and safe for the earth,” Mamaearth cofounder Ghazal said.
Scaling Up In The Times Of Covid-19
Of course, Covid-19 has changed the equation completely. Women-focussed brands now have to branch out to not only reach their core audience, but also audience networks and target other members in the family too. For Mamaearth, this period was all about going at full speed, despite the challenges.
“While most businesses went into dormant mode, with cost cutting and layoffs, we continued to advertise and sell essentials. The advertising cost was lesser and the competition was much lower, and we did not feel the need of cutting down on marketing spends,” Varun said, emphasising that the company overcame the pandemic blues in terms of revenue as soon as the lockdown was relaxed.
During the initial days of the Covid-19 lockdown, Mamaearth did suffer from manufacturing slowdown and supply chain issues. However, it claimed to be seeing pre-Covid level business now. “We are currently servicing more than 26K postal codes including the red zones, which is around 85-90% of all pin codes in the country. We bounced back to pre-lockdown order levels very shortly after the lockdown was lifted.” added Varun.
How Marketing Changes The D2C Game
How did Mamaearth manage the turnaround? It bucked the trend and went full-power with marketing efforts during the lockdown phase and worked alongside manufacturers and logistics companies to ensure that things got back on track once the lockdown was lifted. It also claimed to be the first D2C brand to resume operations soon after the lockdown, though there is no way to verify this claim independently.
“Given our inventory planning was for a much larger business ambition and Covid-19 hit those plans, but we had sufficient inventory in place to service demand.”
Mamaearth’s marketing campaigns and brand communication is centred around the promise of using only the best of nature in its products, added Ghazal. The company has been working with social media influencers to spread awareness about the products and their USP, and build credibility among health-conscious users. Recently, it launched a new campaign called ‘Goodness Inside,’ with the objective of strengthening the brand’s image with ‘Goodness.’
Prior to this, during the lockdown, the company had also launched several pandemic awareness campaigns, including ‘Spread Awareness, Not Fear’ and ‘Let Your Smile Show,’ to promote safety and hygiene practices like wearing masks and distribution of free hand sanitisers among others.
Another thing that worked is adding new products quickly, which seems to suggest to the consumer that the brand is more aware about latest trends and needs than bigger brands. This is something that D2C brands need to replicate to build moats against larger conglomerates in the FMCG and beauty segment. Product iteration is a key differentiator.
Mamaearth, which started out with just six products in its portfolio, now has over 100 SKUs. It introduced close to 12 new products during the lockdown, including ingredients like Vitamin C and Bhring Amla. From selling baby care products during the initial days, the company, over the years, has evolved into becoming a big name in the personal care segment.
Going forward, Mamaearth plans to enter the more niche segments like sheet masks, face cream, hand cream and others. “Our financial goal is to reach a INR 1000 Cr ARR by 2023,” Varun said, adding that the company also has plans to extend its reach beyond the Indian market and tap lookalike audiences everywhere, since it claims to be solving a global problem.
[With inputs from Shanthi S]