Of the major changes observed in consumer behaviour after the Covid-19 pandemic hit India in early 2020, the shift towards organic and natural products was perhaps the most significant. As the pandemic served as a much-needed introspection tool for self-care and healthy lifestyle choices, many wellness-conscious and product-savvy consumers have moved away from chemical products and opted for the organic range. Besides, the ‘vegans’ and the environment-conscious also prefer cruelty-free, sustainable products even at a higher cost.
In sync with the ‘green’ leaning, encouraged by medical professionals and wellness experts, the demand for organic products in the skincare segment is witnessing rapid growth. India’s historical association with ayurveda, the natural science of healing that dates back to nearly 5,000 years, has further strengthened this trend and given rise to a host of organic cosmetics brands.
Although Haridwar-based Patanjali is one of the first companies to enter this niche market in 2006, the likes of Belle Vita Organics, Mamearth, Svatvak and more have entered the space in recent years to leverage the spurt driving this category.
A look at the consumer mindset and overall market data also validate a good growth opportunity. According to a 2019 survey by Statista, 41.96% of Indian consumers were willing to pay up to 25% more for organic products. Also, the overall skincare market stood at $1.74 Bn in 2021 and is estimated to grow at a CAGR of 8.22% to reach $2.57 Bn by 2025, according to Allied Market Research.
What Ailed Svatvak’s Homemade, Organic Skincare Range
Started by Shashi Jain in November 2020, Svatvak is a small office/home office (SOHO) business specialising in organic skincare products. The name comprises two Sanskrit words — sva (my) and tvak (skin). Jain’s family used to manufacture a range of skincare and self-care products using the formulas handed down through generations. But sensing the increasing demand for organic products, Shashi launched her brand with the focus on transparency and sustainability.
Svatvak is run by a team of 15 women and procures most of its ingredients from family farms in Delhi-NCR. The startup claims all its products are handmade, and no large machinery is used in the process. Currently, it offers as many as 12 products such as body butter, soap, facial and hair oil, lip balm and more in the mid-market-to-premium price range. The startup positions itself as an organic brand, however, it has not been certified yet.
However, it was not smooth sailing in a market already dominated by deep-pocketed brands (legacy and otherwise) enjoying deep-rooted customer loyalty. Apart from winning the market share, the startup had its fair share of teething troubles. For instance, Svatvak initially struggled to reach its target customers as it was launched amid the pandemic and lockdowns.
Also, getting people to switch to organic, handmade offerings was tough as most consumers were accustomed to using high-octane commercial products. Besides, the skincare brand did not use preservatives, which shortened its products’ average shelf-life to 4-12 months and created inventory challenges. Svatvak could not manufacture its products unless it had guaranteed sales.
What Svatvak Did To Break Growth Barriers
Just like thousands of home-based microenterprises across India, the skincare brand had a slow start and found it difficult to scale offline due to lack of funds. But unlike many of those businesses, Svatvak decided to take the direct-to-consumer (D2C) route to do away with the usual bottlenecks.
A full-fledged website was launched in November 2020, and advertising was done on social media to create brand awareness. It also offered 200 free samples to random customers as part of its brand marketing initiative. The purpose was twofold. First, it helped the brand get product feedback for further improvements in manufacturing, packaging and marketing. Second, the initiative triggered word-of-mouth publicity and accelerated customer acquisition.
Svatvak was also keen to leverage the growing trend of influencer marketing and approached social media influencers to review its products. The conversations thus generated on social platforms focussed on the benefits of organic skincare and why consumers should switch to it.
How D2C Enablers Helped
Scaling up was not the only problem that plagued the startup at that stage. With more customers and bigger sales generated through online and offline commerce, it had to face greater logistics challenges. Initially, the company intended to use local vendors for sales and distribution. But given the short shelf life of its products and the long time the company takes to sell its inventory, Svatvak had to drop the plan and look for a suitable alternative.
At a friend’s recommendation, Jain tied up with Delhi-based third-party logistics (3PL) player Shiprocket that has the option to ship glass containers with added precaution. As the skincare brand only uses glass-and-paper packaging, the 3PL player’s special offering has largely solved issues like breakage/product damage/wastage and return to origin.
Consequently, the company has been able to sell pan-India, reduce COD transactions (due to a rise in consumer trust regarding product quality and safe delivery) and increase its overall sales volume.
Today, the likes of Shiprocket form an integral part of the ecosystem that supports small-to-medium D2C brands and play a key role in accelerating their growth. Also known as D2C enablers, these players offer their own/third-party solutions, including platforming, marketing, logistics, payments and more, to ensure a seamless operational flow.
In essence, the enablers bring in their infrastructure and domain expertise for brands that cannot afford to develop in-house operations. Apart from Shiprocket, some major players in the D2C enablement space include Tel-Aviv based website developer Wix, Mumbai-based marketing automation company WebEngage, Bengaluru-based payment gateway platform Razorpay and more.
The Bottom Line
Besides its core operations, Svatvak is committed to environmental conservation. Unsurprisingly, its packaging materials only include glass containers and paper to reduce plastic waste.
It also plans to add more products under bath and body care categories to promote a healthy and environment-conscious lifestyle for all consumers. Eventually, it wants to expand overseas and cater to global markets.