In the rapidly evolving landscape of India's beauty and personal care industry, Honasa Consumer has carved out a dominant position as the largest digital-first company in the sector. Co-founded in 2016 by visionary entrepreneurs Varun and Ghazal Alagh, Honasa has achieved remarkable milestones, including attaining unicorn status in January 2022. The company's innovative approach and robust growth strategies have set it apart as a market leader, culminating in the launch of an initial public offering (IPO) last year, valued at approximately Rs 1,701 crore.

Strategically expanding its distribution network, Honasa has significantly bolstered its omnichannel presence. With over 1.7 lakh retail touchpoints and a 37 percent year-on-year increase in distribution, the company has made substantial inroads into both urban and rural markets. Additionally, its growing footprint in modern trade—spanning over 8000 stores across 31 retail chains—demonstrates a strategic push to enhance market reach and consumer accessibility.

Its brands have demonstrated robust year-on-year growth, affirming its dedication to sustained profitability. In Q3 FY24, the company’s operating revenue surged by 28 percent to Rs 488.2 crore compared to the same quarter last year. Notably, its EBITDA witnessed an impressive 192 percent increase, reaching Rs 34 crore, showcasing its focus on brand building and market engagement.

Innovative Beauty Pioneer

Since its inception, the company has worked with the primary objective of developing products that address beauty and personal care problems faced by consumers. It encompasses a diverse portfolio of seven innovative brands, each excelling in specific subcategories. Its flagship brand, Mamaearth, is celebrated for its natural skincare solutions. The Derma Co. offers expert science-backed skincare, Aqualogica introduces water lock technology for superior hydration, Ayuga combines Ayurveda with modern skincare, while BBlunt helps get salon-like hair at home. Dr. Sheth's delivers a blend of science and nature in skincare for Indian skin and recently launched Staze offers affordable cosmetics for Gen-Z.

“Innovation is indeed a cornerstone of our strategy, driving approximately 13 percent of our sales in the recent period and serving as our primary growth engine. Our focus on data-driven, innovation and product development has yielded positive outcomes, with 122 new products launched in CY23,” said Ghazal and Varun Alagh, Co-Founders of Honasa Consumer.

“Our commitment to staying ahead of the curve is unwavering, and our recent innovations reflect this dedication. We've introduced groundbreaking ingredient innovations, such as Hibiscus, Beetroot, and our TDC DR V Skin Renew range. These innovations underscore our agility in responding to evolving consumer needs and preferences,” they added.

The Derma Co recently achieved Rs 500 Cr ARR milestone and Dr Sheths and Aqualogica have been following suite and are growing fast. In the financial year 2023, the company launched 5.7 times more new products and SKUs than the BPC industry median.

Foray into Color Cosmetic Line

Honasa Consumer has introduced its latest venture, Staze, a color cosmetic line. With its innovative take on color cosmetics, Staze sets a new standard for long-lasting, high-performance, multi-purpose makeup, crafted to cater to the dynamic needs of new-age consumers.

Staze's product lineup features a three-in-one Bullet Lipstick, providing three unique shades in a single, convenient package starting at just Rs 449. This offering combines value and versatility for consumers. Beyond this, the brand boasts a comprehensive portfolio that spans all makeup categories—from eyes to lips and face—ensuring 12-hour long wear and top-tier performance. With an average price point of under Rs 300, Staze delivers affordable, high-performance color cosmetics to its customers.

“Our brand’s target demographic is the vast cohort of Indian women in the age group of 18-24 segment, who prioritize innovation and quality at accessible price points. We aim to expand its product range and distribution channels, leveraging our digital-first approach to reach Gen-Z consumers across the country. In addition, Staze aspires to become the go-to color cosmetics brand for new-age consumers who seek both quality and value,” stated Ghazal Alagh.

Digital-First Success

Honasa Consumer prioritizes a Direct-to-Consumer (D2C) strategy as a crucial component of its growth plan. This approach fosters direct engagement with consumers, enhancing their overall shopping experience. Its D2C strategy extends beyond its website to include various online platforms where consumers actively seek products and interact with brands.

In addition to its website, Mamaearth products are available on major e-commerce platforms such as Nykaa, Purplle, Amazon, Meesho, and Flipkart. “By leveraging these platforms, we tap into their extensive user bases and established infrastructure to showcase our offerings, reach new audiences, and drive sales. These platforms also provide valuable touchpoints for interacting with consumers, collecting feedback, and understanding market trends,” asserted Varun Alagh.

“We will continue to be a digital-first company where we will launch the brand digitally and then allow the brand to follow its own course based on the incoming demand from consumers and market,” he further added.

Additionally, Mamaearth has already made significant inroads into the offline retail space, currently present in more than 1,20,000 stores with its leading product categories. Offline still continues to be one of the largest channels and almost 85 percent of the purchases in the category still happen offline.

“The next level of growth, we very strongly believe will continue to come from offline for Mamaearth. We are committed to doubling down on our offline retail strategy to drive further growth for the brand,” noted Ghazal.

“Mamaearth's offline presence is only at around 1.7 lakh retail touch points which is a fraction of the available opportunity in India. For our expansion plans, we have used a very scientific approach wherein we closely study consumer behavior and purchasing patterns so that we can create a product assortment that is curated for them basis what they are buying or looking for in the market. Depending on the demand, we choose to expand through general trade, modern trade, or exclusive brand outlets,” she highlighted.

Tier II Triumph

Tier II and beyond significantly contribute to the company’s overall revenue, amounting to 46 percent of its total contribution. This underscores the widespread acceptance of the brand propositions and price points across diverse consumer segments.

“As we continue to witness the emergence of this 'new India,' we are committed to expanding our presence in these markets. For Mamaearth, our focus lies in expanding distribution through both general trade and modern trade channels, as well as through the establishment of exclusive stores, ensuring greater accessibility and brand presence in Tier II and beyond regions,” said Ghazal.

Beauty Powerhouse Vision

Honasa aims to become India’s leading beauty and personal care company. Varun said our primary focus is on achieving robust revenue growth and profitability, with the aim of surpassing specific revenue targets and attaining a defined profit margin. This involves deepening our presence in existing markets through strategic partnerships and retail expansion, as well as venturing into new geographical regions to tap into emerging opportunities.

“While we currently have a distribution presence globally, our focus outside India is primarily on the distribution front. However, we are open to exploring international expansion opportunities in the future,” they concluded.