Beauty and personal care brand SUGAR Cosmetics has become one of the most popular D2C brands in the country. Currently, it is clocking the revenue of Rs 500 crore and is expected to reach Rs 2,000 crore over the next 24-36 months. However, this wouldn’t have been possible without the brand taking various major strategic risks at the right time during its journey and that led it to where it is today.
 
When the company was founded, the world was changing very fast but for women, it was changing even faster, says Vineeta Singh, Founder & CEO, SUGAR Cosmetic in an exclusive interaction. The brand thus wanted to take the advantage of the changing scenario and to create something which targets the women consumer.
 
“When we started SUGAR, less than 10 percent of the online shoppers were women. Today the number is 43 percent. As women become more confident and independent, the positive impact can be seen in many industries that revolve around women. And I wanted to be a part of that,” adds Singh. 
 
When the brand picked up the pace, it found that the consumer base of the brand was mainly women in metros primarily in the age group of 20-25. “Now, these women were very demanding because they are following global social media influencers. They wanted stuff that was individualistically great for them,” asserts Singh.
 
The company was first launched as an e-commerce brand back in 2012 where it used subscriptions to curate products from different brands and deliver them to these young women. It later realized that even though it had a cool algorithm that could curate products better and it had the technology to predict what kind of products work for which consumer, without the supply chain getting solved, the brand couldn’t make much progress.
 
Thus, it made the decisive choice to double down on bringing its own line to consumers, starting with a few products, which got a huge positive response from the consumers.
 
“We had influencers talking about finally discovering the perfect lipstick for deep skin tone. Things like that helped us reach a certain level without spending anything on marketing,” she states.
 
Need To Go Offline
Beauty and personal care D2C brands have started setting up retail stores in recent times owing to the vast potential these brands sense from the offline sales channel. Many D2C brands such as Plum, mCaffeine, MotherSparsh, MyGlamm, The Man Company, etc. Have entered into the offline arena.
 
In fact, these D2C brands have reported that their businesses have skyrocketed after selling their products through supermarkets and neighborhood stores. In fact, 50 percent of the business of SUGAR comes from offline channels.
 
 “For us, offline has been profitable and efficient in terms of scale. In a country like India, offline and online empower each other. When you are available offline, people start trusting you online as well - your sales benefit online by your sales offline because of the trust factor,” she emphasized.
 
This is also true because of the fact that only 6 percent of sales come from the online channel in the beauty and personal care segment. Despite pandemic, offline sales comprise 94 percent of the total industry. Moreover, with time, the dependence on social media platforms like Facebook, Google, etc. for paid campaigns become so high that the company’s profitability has been impacted.
 
“We will never acquire a customer by losing money. That is like a downward spiral and never ends,” said Singh. She also shared a piece of advice to the D2C brands willing to get into offline, stating, “Ensure that the offline and online experience is similar. You can still be a D2C brand, despite having an offline store and having a lot more data than traditional brands.”
 
Right Fundraising Strategy 
For a start-up, one of the biggest challenges it has to face in its journey is to raise funds to thrive and grow in the market. Singh (who also is among the investors in the currently trending show Shark Tank India) had also faced similar challenges when growing her business. Singh shares: “When you are investing in a business, you are valuing the future potential. Where there was a valuation that was reasonable and ask that is commensurate with the size of the business, the chance of getting funding was higher.”

“Secondly, even if your business is not great, if you come across as a founder who had conviction and would be able to deal with a lot of failures, the chances of getting funding were higher. Thirdly, understanding the market size is very important. This is because the VCs are coming into this only to make a multiple of their revenue,” Singh further adds.

READ MORE: 10 Ways to Build a Successful D2C Brand