E-Commerce & Promotion

CASE STUDY

“Social media marketing tools for two new start-ups in the Ecommerce sector.”
SUGAR COSMETICS - MAMAEARTH

SUBMITTED BY
Jasleen Kaur ( MFM/21/355 )
Kanika Bansal ( MFM/21/501 )
Urvi Thakur ( MFM/21/415 )

SUBMITTED TO

Department of Fashion Management Studies (FMS)

National Institute of Fashion Technology (NIFT)
(Ministry of Textiles, Govt. of India)
Panchkula, Haryana 134107
 EXECUTIVE SUMMARY

The cosmetics industry is one of the major industries that have attracted many
players due to its rapid growth. Two such brands that have capitalised on the opportunity
are Sugar and Mamaearth. When it comes to the cosmetics industry, people are more
sensitive about the raw materials used and the manufacturing methods. The cosmetics
business is currently attracting by highlighting vegan, cruelty free and natural cosmetic
products.
The average time spent on social media applications by an Indian in 2022 is 2 hours and
27 minutes. We are actually living in the social media era where things can become
memes and people can become stars overnight. But more than this, people believe what
they see on social media. It is the platform for ordinary people to voice out their opinion
and Mamaearth & Sugar cosmetics know it well. Their target market of these brands is
the product conscious consumer who is well aware about trends and uses various social
media platforms to stay up to date.
The companies market on several social media sites including youtube,Twitter,
Facebook, LinkedIn and Instagram. The case study, therefore, offers knowledge on
business strategies and their use of social media marketing stratergies of these two Indian
cosmetics industry start ups and how their authenticity and forward marketing strategies
helped them be successful.

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E - COMMERCE

CASE STUDY
Sugar Cosmetics - MamaEarth

INTRODUCTION TO INDIAN COSMETICS MARKET

The huge potential of the beauty business makes it an equally crucial part of the economy
of every country. In the medieval ages, upper class men and women started using
cosmetics more frequently. Cosmetics were frequently used to maintain and adorn the
body. Cosmetics include all treatments used topically to clean, texture, soften, or protect
the skin, hair, nails, lips, or eyes. Cosmetics are "materials designed to be applied to the
human body for cleansing, decorating, encouraging appeal or modifying the appearance
without affecting the structure or functions of the body," According to the US Food and
Drug Administration (FDA). One of the most lucrative and secure industries in India
is the cosmetics industry. The potential for Indian brands to flourish is huge. The growth
of the Indian cosmetic sector has recently been fueled by both men and women's
preferences for beauty. Few important Indian companies, like Lakme, have historically
enjoyed a dominant position in the Indian cosmetics business. However, over the past ten
years, many foreign companies have entered the Indian market.

HISTORY : COSMETICS INDUSTRY

India didn't have a strong economy when it won independence in the early 1950s. Indian
women spent valuable foreign currency on Western cosmetics, but they were unable to
get high-quality cosmetics since they weren't sold in India. The biggest obstacle was
creating a brand identity that would appeal to both types of girls. Lakshmi kajal or lipstick
would never have been successful with Indian ladies who used to purchase cosmetics
from other countries. Former Indian Prime Minister Jawaharlal Nehru advised a cosmetics

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company be founded since more women were being found to spend additional money on
pricey foreign beauty goods. So, in order to find a solution, he went to JRD Tata. Tata
chose Lakmé and borrowed the name from Leo' Delibes' French opera, which is thought
to be a French translation of Goddess Lakshmi and refers to her as "The Goddess of
Wealth" because of her elegance.

E-commerce has made launching a business possible for many Indian entrepreneurs. By
breaking the highest mark in the cosmetics industry, Sugar Cosmetics and Mama Earth
started a new era in e-commerce. This essay makes an effort to assess Sugar cosmetics
and Mama Earth's business plan. Its internal and external environments, its history of
success or failure, its rise or fall, its stakeholders, their expectations, rivals, and
collaborators, as well as their strategy, product/service quality analysis, the business
environment, financial performance analysis, marketing strategy, corporate social
responsibility, and plan are all researched and presented.

MARKET ANALYSIS

India's Beauty and Personal Care Market is estimated to be USD 24.53 Bn in 2022 and
is expected to reach USD 33.33 Bn by 2027, growing at a CAGR of 6.32%.

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Changing lifestyles, and growing awareness contributed to a significant development in
India’s cosmetic industry. India is ranked fourth globally for generating the highest
revenue from the beauty and personal care market in 2021. The cosmetics market
worldwide is controlled by a handful of conglomerates like Unilever, Procter & Gamble,
and L’Oréal. Although these were immensely successful in India, domestic counterparts
have an equal footing, with newer, organic brands entering the market. However, the
international brands were not able to fulfill the demand for products suitable for Indian
skin types which created an opportunity for local companies such as MamaEarth, Khadi
Essentials Plum, and SoulTree to promote their homemade cosmetics and personal care
products.
TRADE OF MARKET
Cosmetic products and their application have been documented since the Indus valley
culture in India. Before the turn of the century, beauty products, including skincare and
hair care were mostly homemade, using herbs and ingredients available locally in India.
Besides, some beauty practices were based on routine and other practices were
dependent on the seasons. In Ayurveda, Tailams (oils) and Ghritas (clarified butter or
ghee) were used for facial beautification.

With globalization, beauty and personal care products from other countries became
available in India, increasing accessibility and affordability. One example is the
replacement of Shikakai (a powder made from parts of a dry shrub) with shampoos
containing surfactants. Ironically, the word shampoo comes from the Hindi word Champo
(meaning to press, knead and soothe) borrowed during the colonial era.

ONLINE MARKET
The COVID-19 pandemic boosted online discovery and sales of a fresh generation of
cosmetic products due to the closure of supermarkets, department stores, hypermarkets,
and salons. Similar to China, India’s consumer relocation to online channels has benefited
the DTC (direct-to-consumer) brands. One such success story in the sector, founded by
Falguni Nayar was Nykaa one of the leading cosmetic companies with the largest share
in the online beauty and personal care market.

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Moreover, consumers preferred the flexibility and safety of online purchasing and home
delivery. Thus, e-commerce surged in the beauty industry. For the first time, the market
size achieved the largest rise for online beauty and personal care. Other factors that
contributed to the expansion of the beauty and personal care market were the trends
towards the use of clean and environmentally friendly products. This in turn increased
concern about personal grooming driving demand for beauty and skincare business, and
the rise of social commerce.

Published by Statista Research Department, Sep 28, 2022

WHY OFFLINE TO ONLINE?

> Impact of Covid-19

“Since COVID, we’ve really doubled down on digital marketing, digital PR, working
with influencers, and overall trying to be even more creative. Instead of sending
out traditional press releases, we are now focusing on pitching over social media.”

Since beauty & cosmetics is categorized as a non-essential item, there was a sudden
standstill on sales as the 3 major points of sales for beauty & cosmetics products: Malls,
Salons & E-Commerce websites were instructed to complete shut-down of services.
Sales hit rock bottom to a near-zero during the strict nationwide lockdown period that
started from late March’20 and continues till early May’20. With the spike in ecommerce,
the cosmetics industry, among many others, had to adapt quickly to change. The new
global lockdown measures and physical distancing has meant that some cosmetics goods
such as make-up have fallen into the non-essential product category. Meanwhile, on the
other end of the spectrum, skin-care, hair-care, and bath-and-body products appear to be
benefiting from the self-care and pampering trend. Beauty Influencers are keeping fans
busy with their videos on DIY masks and skincare hacks. COVID-19 has turned beauty
on its head, creating a drastic shift from a retail and consumer standpoint.

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DIGITAL TRANSFORMATION : INDIAN CONSUMER
While conventional beauty retailers suffered a huge setback due to Covid-19, online sales
have soared. According to recent research ('impact of Covid-19 on e-commerce sales')
by Red Points, a digital revenue recovery platform, 73 percent of consumers preferred
online shopping over in-store purchase. “Beauty businesses have increased their online
presence. Recognising the trend, they are now more active on social media,” says Ritika
Jayaswal, founder and CEO of Nourish Mantra, an online-only beauty brand. This, she
adds, has helped companies reach out to a wider consumer base.
Digital marketing was significant even before the pandemic, but now it’s vital. “During the
pandemic, companies caught up on a number of ideas and practices that have since
turned out to be indispensable. Influencer marketing, keeping up with social media trends,
and expanding to new and diverse e-commerce platforms are just a few of them,” informs
Jayaswal. More than 18 per cent consumers on eCommerce in the last couple of months
for beauty personal care have been first-time users. Digital intervention has become a
significant part of the strategy. The sudden rise and shift of consumption and consumer
interest for Locally manufactured brands & products will have a negative impact on foreign
brands or imported products at least in the near short term. However in the long term, the
quality of products will be a deterministic factor to establish a clear preferred choice. The
willingness of brands to customize their products for different segments of customers will
play an important role. Today’s customer is ready to support local products, but they want
products built to their needs.

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INDIA’S FAVORITE COSMETICS

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MAMA EARTH: A Startup that has become an
established Brand in the Organic Skincare
Industry

Mamaearth is an Indian startup that was founded in 2016. The company produces and
sells organic products for babies and mothers.

At first, the company was unknown and struggled to make a name for itself. However,
over the past few years Mamaearth has become one of the top organic brands in India.
Today, Mamaearth is a top organic brand with a loyal following of customers all over the
world!

Founders

Mamaearth is an Indian organic brand that was started by two entrepreneurs, Varun Alagh
and Ghazal Alagh, in 2016.

At the time, they were both working in corporate jobs and had a strong desire to start their
own business.

They were passionate about creating a product that was safe for their families and would
make them feel good about using it. They did a lot of research on the topic of organic
products and decided to create a line of skincare products made from natural ingredients.

The idea for the company came about after they had their first child and couldn’t find any
good quality, organic products on the market. They decided to start their own company
and create safe, toxin-free products for babies and mothers.

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Varun Alagh, CEO and Co-founder

Varun Alag is the CEO and Co-founder of Mamaearth. He has a degree in Engineering
from Delhi College of Engineering and an MBA from IIM Bangalore. He has worked in
various corporate jobs before starting Mamaearth.

Ghazal Alagh, COO and Co-founder

Ghazal Alagh is the COO and Co-founder of Mamaearth. She has a degree in Economics
from Delhi University and an MBA from IIM Bangalore. She has also worked in various
corporate jobs before starting Mamaearth.

Journey

Mamaearth’s journey began when the two founders quit their corporate jobs and decided
to start their own business. They had a strong passion for creating products that were
safe for families and would make them feel good about using it.

They did a lot of research on the topic of organic products and decided to create a line of
skincare products made from natural ingredients.

The duo started with just two products, a body lotion and a face cream. They sold these
products through their website and through social media platforms such as Facebook and
Instagram.

In the beginning, they faced many challenges such as low sales, high shipping costs, and
return rates. However, they did not give up and continued to work hard towards their goal.

After a few months of struggle, things started to improve for Mamaearth. Sales began to
increase and they were able to reduce their shipping costs.

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They also started to get more positive reviews from customers. This helped them to attract
more customers and grow their business.

Today, the startup is one of the leading organic skincare brands in India. They offer a
wide range of products including body lotions, face creams, hair care products, and baby
care products.

They are available online and offline through major retail stores such as Amazon, Flipkart,
and Nykaa. This startup has come a long way from being an unknown startup to a top
organic brand.

Mamaearth is a unique brand in the beauty industry because it doesn’t just sell products
but also creates them. It’s not just a business selling cosmetics but an entire ecosystem
around the brand and its products. This is why Mamaearth has been able to grow so fast
within such a short period of time.

The first thing you should know about Mamaearth is that it’s one of the fastest-growing
beauty brands in the world today. The company has been able to achieve this incredible
growth by creating innovative products and services for its customers, who are primarily
millennials.
The popularity of organically manufactured products is apparent since they have little or
no adverse effects on the skin, hair, or any other area of the body. Taking advantage of
this desire for organic goods, Mamaearth has grown into an exceptional business in the
cosmetics market, with products that have earned the American Made Safe Certification.
This is the first nontoxic cosmetic seal in use today.

Mamaearth is a 2016 Indian brand that has garnered over 1.5 million clients in a few
years. Mamaearth competes with large corporations such as Johnson & Johnson,
Himalaya, and others. Toxin-free infant care, hair care, and skincare items are some of
the products that come from the house of Mamaearth. Varun Alagh and Ghazal Alagh are
the company’s founders.

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Target audience

Mamaearth began by offering pregnancy, infant care, and hair care items to moms and
their newborns. They also offered toys, accessories, and clothing. When the startup first
began to grow, it focused on the millennial demographic by providing chemical-free
cosmetic items such as creams and serums, face wash, hair oils, and lotion. They also
catered to the males by selling lotions, aftershave, and hair oils.

BUSINESS MODEL OF MAMAEARTH

Mamaearth operates on a direct-to-consumer (DTC) model. This implies that they offer
their items to clients directly through their website and retail outlets.

They do not employ any middlemen, such as distributors or wholesalers. This allows
companies to keep their costs down and provide competitive prices on their products.

Here are the key factors that make the Mamaearth business model unique:

ABILITY TO CONNECT WITH THE TARGET AUDIENCE

There are many successful businesses across the world, but not all of them have a distinct
business model. In reality, the majority of them follow a similar business plan and rely on
their brands to grow. But what distinguishes Mamaearth’s business plan from others is its
ability to connect with and acquire the trust of its product’s target audience.

When the founders were seeking for toxin-free and natural baby items online, they came
up with the idea for Mamaearth. They recognized what most parents wanted for their
children, so they created an eco-friendly product line to meet that need. Baby wipes,
diaper creams, shampoo, body wash, and bath soap are all available. The products are
gentle on infant skin and devoid of dangerous chemicals such as parabens, which are
commonly found in cosmetics.

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Mamaearth is a “mum-powered” firm that involves many moms in the process, from
inspiration and conceptualization through product launch. They created an online platform
where mothers can interact and exchange nursing, parenting, and working mom
experiences. This contributed to the brand’s reputation among moms, who became
devoted consumers after utilizing Mamaearth goods.

SUPERIOR HIGH-QUALITY PRODUCTS

Mamaearth is a company that strives to make products that are both safe to use and safe
for the environment. They believe in offering high-quality products at reasonable pricing.

Mamaearth has a strong business plan because they have paid attention to the specifics.

Natural components are used in their goods, making them safe for the environment and
children. In addition, they solely employ organic components in the manufacture of their
products. This allows them to decrease waste while also saving money on raw supplies.
They’ve also introduced bamboo-based baby wipes, 100% natural plant-based
toothpaste for kids, and skin and hair care products with natural components like onion,
CoCo, and charcoal. Because the baby wipes include no chemicals or color, they are
completely safe for your child’s skin.

Mamaearth’s creators believe in giving high-quality items to its customers. Individuals

suggest Mamaearth items to others. Word-of-mouth marketing has worked wonders for
their business.

To attract new clients and keep existing ones, the corporation gives product discounts.
They also offer a loyalty program where customers may earn points for purchasing their
items. Earned points can be exchanged for cash back or gift cards.

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LEAN INNOVATION CYCLE

Mamaearth began as a firm with the goal of producing nutritious meals. The founders
intended to develop a nutritious product to assist individuals in changing their eating
habits and living better lives.

The entrepreneur had the concept of developing a product that would meet the demands
of those who required high-quality meals at a reasonable price. He was a firm believer in
experimenting and listening to his customers’ input to ensure he supplied exactly what
they want.

Lean innovation enabled them to quickly recognize and meet their clients’ demands. It is
a fresh method of approaching business. It is a strategy that enables businesses to
constantly enhance their goods and services while minimizing waste and enhancing
consumer happiness.

Mamaearth used lean innovation to better understand and meet its customers’
requirements. Experimentation assisted them in improving the quality of their products
and developing new product concepts. Using this strategy, they quickly fulfilled their
consumers.

MAMA EARTH’S SEO STRATEGIES:

1)Mama Earth’s Website Strategies

Today, all businesses must make sure their websites are optimized for search engines.
Let’s look at how Mama Earth performs in search engines and the results they can get
from doing so. The authority score of Mama Earth’s website is 51, and it receives 2 million
visitors from organic search and 219.2K paid search traffic.

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They use the following tools for their website to ensure they optimise it well.

A file called an SSL certificate is installed on the primary server of a website. It is merely
a data file that includes the public key, the name of the website owner, and other details.
TLS cannot encrypt a website’s traffic in the absence of an SSL certificate. Below, you
can find the SSL Certificates installed by Mama Earth.

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2) Mama Earth’s On-page SEO Strategies

As of July 2022, the last time Mama Earth posted a blog was on February 2022. Their
blogs primarily consist of text and also has space for one to leave a comment below each
blog.

3) Mama Earth’s Off-page SEO Strategies

Enhancing search engine and user views of a site’s popularity, relevance,

trustworthiness, and authority is referred to as off-site ranking factor optimization. Each
month, 1.5 million people visit Mama Earth’s website, which prioritises 91.5K terms.

According to the graphs below, Mama Earth’s number of backlinks has increased since
September 2021 and has continued to increase ever since.

Mama Earth has been gaining the same amount of backlinks as they have lost except in
March where they lost a significant number of backlinks and experienced a hike in May.

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Business and industry as well as internet and telecom are the two key sectors that make
up the majority of Mama Earth’s backlinks. Others include shopping, arts and
entertainment, web services, and more.

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MAMA EARTH SOCIAL MEDIA MARKETING STRATERGIES
The best approach to interacting with your target audience is through social media. Social
media websites are a key component of Mamaearth's marketing plan.

Do you know how many people spend their time on social media? The answer is every
second individual. We are actually living in the social media era where things can become
memes and people can become stars overnight. It can make and break people. But more
than this, people believe what they see on social media. It is the platform for ordinary
people to voice out their opinion and Mamaearth knows that. The crowd they are looking
for is available on social media that’s why they approach various influencers to spread
the word about Mamaearth. The company is engaged on several social media sites,
including youtube,Twitter, Facebook, and Instagram.

Mamaearth's most influential approach is Influencer Marketing, which includes hashtags

on platforms.

The best approach to interacting with your target audience is through social media. Social
media websites are a key component of Mamaearth's marketing plan.

1)Instagram marketing

Mama Earth’s Instagram account has over a million followers as of December 2022. The
engagement rate of Mama Earth’s Instagram page is 0.15% and receives an average of
1,610 likes and 43 comments.

These are the different kinds of posts you can find on their Instagram account

2)Influencer-based: They collaborate with influencers to increase their reach and get
first-hand reviews to influence their followers

Mamaearth works with a lot of Influencers on the internet. Influencers have helped the
company to reach a wider audience.

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Influencers tell the benefits of these products on various social media platforms.
Mamaearth also works with five hundred mother bloggers to spread awareness about the
brand.
Influencers can heighten brand recognition and have a favorable impact on your
company’s overall success. Influencers are so valuable that many businesses would pay
them to promote their products or services.

Influencers have helped the brand reach a larger market audience. Influencers promote
the advantages and applications of these items on various social media channels.

3)Mama Earth’s Facebook Strategies

Mamaearth first concentrated on client acquisition because it is a brand that prioritises

digital media. Its customer base increased to 5 million during the first two years of
operation, with Facebook playing a significant part in this growth.

4)Youtube marketing

There is no doubt that YouTube has become one of the strongest channels for spreading
brand awareness. Almost half of the population prefers to watch review videos on
YouTube rather than reading about it. This is exactly why brands want to take full
advantage of the platform. There are many influencers on YouTube with a high number
of subscribers that can spread awareness about the product. Mamaearth has improvised
its marketing strategy by reaching out to influencers on YouTube. Not just this, in
comparison to traditional advertising, the marketing cost is modest.

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5)Mama Earth’s Google Ads Strategies

Mama Earth also uses Google Ads to get more visibility for its website. They have bid on
186 keywords to date, and received 218.9K traffic. According to the statistics below, you
can see that they spend $319.2K on Google Ads.

These are the following keywords and their positions.

In the graph below, you can see the paid search trends for Mama Earth

6) Brand endorsement

Brand endorsement is when an influencer promotes your products or services on their

social media page or blog post. This is a common way for businesses to use influencers

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for marketing purposes because it allows them to reach out to an audience that might not
be familiar with their brand yet. It also helps with building trust and credibility in the eyes
of consumers because they see someone who looks like them endorsing something they
use or wear every day.

Working with Bollywood Actress Shilpa Shetty Kundra as a Mamaearth brand

ambassador has to be their best marketing strategy. Shilpa is an influential personality in
today’s time, and her endorsement adds value to their brand name. She has appeared in
several television shows, films, advertisements, and music videos. The popularity of
Shilpa Shetty grew in the business world when she became the face of the Tata Nano car
ad campaign in India. This was one of the highest-paid ads in India because it got more
than 8 million views on YouTube within three days of launch!

7) Digital ads

Online ads are another way businesses use influencers for marketing purposes because
they’re easy to set up, cost-effective, and you can reach a broad audience at once. You
can also choose what kind of ad you want to run based on your budget and goals for each
campaign.

Mamaearth primarily promotes itself through digital ads. They have incredibly utilized
digital ads and increased their customer base. Their ads are very catchy and effectively
symbolize their brands.

8)TV Commercials

TV commercials method is considered as the traditional method and somewhat old

schooled. So initially the company didn’t believe in the idea of advertising the brand
through TV commercials. They want to do something out of the box, but the thing is TV
has an influence on people and this is exactly why they decided to dip their toes in the TV
commercials too. They did launch their first advertisement on the big screen about the
onion hair oil. The good part was they focused on the benefits of using onion hair oil and

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how the person came to know about this brand through one of its colleagues. We hope
that we will see a lot more of Mamaearth on commercials in upcoming times.

9)Running Digital Campaigns

The brand owners assert that after realising the effectiveness of digital marketing, they
allocated 90% of their marketing budget to this channel and the remaining 10% to more
conventional channels like television.

Because they were a chemical-and toxin-free company, they established digital

campaigns such as "Plant Goodness," which involves planting a tree for every order, and
"Plastic Positivity," which focuses on plastic recycling. This helped in developing their
reputation as an eco-friendly brand.

Mamaearth had a solid online presence by the time the lockdown was implemented, in
contrast to many other firms that were still dealing with the effects of closing their physical
stores and had a poor online presence.

THE CAMPAIGNS
1) MAMAEARTH LAUNCHES ITS INTEGRATED MARKETING CAMPAIGN
#ISSWINTERGLOW

“The campaign film highlights the brand ideology of bringing the wisdom and goodness
of household DIY recipes in easy-to-use formats with the same goodness of natural
ingredients without any toxins. “

Mamaearth from the House of Honasa, launched its latest integrated marketing
campaign, #IssWinterGlowNaturally, with celebrated actor and brand ambassador Shilpa
Shetty Kundra.

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The film opens with Shilpa Shetty Kundra walking into her friend's house and unfolding a
scenario that leaves her intrigued and confused. To help her friend with a trusted natural
solution without all this 'chip chip' and 'jhanjhat', Shilpa recommends Mamaearth honey
malai cold cream, crafted with the goodness of natural ingredients like honey and malai,
the cold cream is toxin-free and made safe certified.

Mamaearth has announced their latest campaign “EverydayisEarthday” to celebrate

mother earth every day.

The brand has announced the campaign by way of a digital film encapsulating the
essence of World Earth Day.

Conceptualized by Korra Worldwide, the film starts with a little girl named Shreya, the
central character of this campaign who is depicted as a goodness specialist at
Mamaearth, emphasizing how every day is Earth Day at Mamaearth by explaining the
facts.

2) MAMAEARTH LAUNCHES #TRULYBEAUTIFULME CAMPAIGN FOR

VALENTINE’S DAY

Mamaearth, the fastest growing FMCG brand in India, launches #TrulyBeautifulME

campaign in collaboration with TrulyMadly, the fastest growing dating app, to celebrate
finding beauty in little acts of goodness which truly makes one beautiful and helps build
real connections.

Every year, closer to Valentine’s Day, people begin their search for their perfect match
and resort to dating apps to find their beautiful partner for that V-Day. Mamaearth has
always had a different perspective on what makes people beautiful and hence the brand
decided to run a poll on their social media platform to find what makes one beautiful. The
poll gave the followers 3 attributes which define their perfect partner- Good Looks, Good
Deeds, or Good Style. Contrary to popular opinion, the maximum votes came for Good
Deeds, reiterating the brands belief that it is the goodness in actions that makes one truly
beautiful.

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With this initiative, Mamaearth and TrulyMadly are hoping to help the youth identify true
beauty and forge real connections, that transcend beyond physical appearance,
debunking the age-old myth that beauty is external.

To communicate the initiative, Mamaearth has created 2 films reiterating the collaboration
narrative by showcasing how beautiful actions help connect with likeminded people and
build connections that go beyond looks. In the first film, the protagonist is a girl who reuses
plastic containers as pots for her plants and loves taking care of them. She uploads a
picture with her plants on the app and that helps her connect with someone who sees
beauty in that deed. In the second, the protagonist is a male who is getting ready for his
Valentine’s Day date. He has a card and flower ready for his valentine. As he walks closer
to his date, it is revealed that his date is his grand-mother and uploads that picture of his
TrulyMadly profile. These simple deeds of goodness help them connect with people who
see beauty in their deeds, thereby helping them forge better connections.

SUGAR COSMETICS

Starting From The Starting

Sugar Cosmetics was founded in 2012 and has been in business for 10 years. The firm
began with only two items: a black matte eyeliner and a black kohl pencil. Since then, it
has steadily expanded, introducing more goods and amassing about 450 stock-keeping
units. So, in only a decade, Sugar has become one of India’s most well-known direct-to-
consumer beauty firms.

The Founders: Kaushik Mukherjee and Vineeta Singh

Kaushik Mukherjee, Co-Founder and CEO of SUGAR Cosmetics, holds degrees from
BITS Pilani and IIM Ahmedabad. He also speaks at TEDx. Kaushik runs marathons when
he is not busy operating one of the country’s biggest cosmetic firms. In addition, he is an
Ironman triathlete.

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Vineeta Singh, Co-Founder and CEO of SUGAR Cosmetics, is an IIT Madras and IIM
Ahmedabad graduate and a TEDx speaker. She competes in triathlons and
ultramarathons. Vineeta was a well-known figure on the Indian business reality show
Shark Tank, and she has also invested in several businesses.

The Team

Suchit Sikaria, the Chief Business Officer since July 2021, is an IIM-Ahmedabad alumnus
with over 14 years of experience in sales, marketing, and business operations leadership
with Performics India and Nokia India. Sikaria also comes armed with four years of startup
expertise from his entrepreneurial business, Bhukkadpanti, a food startup. The Linkedin
profile of Sugar Cosmetics lists a strength of 201-500 employees.

How Everything Fits Together

Before Sugar was incorporated, Kaushik was with McKinsey, and Vineeta was in the
process of enhancing her skills at another firm. Although they had no plans yet to work
together, they respected and acknowledged each other’s abilities. Eventually, as they
both realised they were interested in various arenas: Kaushik’s in technology and
Vineeta’s in product development and marketing, it fueled the decision to team up.

As Vineeta took over the conceptualization of a women’s business, Kaushik worked on

an e-commerce project. Both budding entrepreneurs felt that they shared a strong bond
that could handle their shared interests; that is how Sugar Cosmetic was created. Today,
the company is a strong contender for the top position in the fast-growing beauty sector.

Sugar Cosmetics – Business Model

Sugar has a D2C model of business. The company uses an omnichannel approach to
sell its products which means that it sells its products in various eCommerce
marketplaces like Nykaa, Amazon, etc. Its sales in India and exports constitute significant
revenue streams. Sugar Cosmetics has a hybrid online-offline business model with a
presence in more than 10,000 sales outlets in more than 130 locations.

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The company has been working on devising business strategies that can help them
strengthen the client-brand relationship, especially after the pandemic. Their new
business model incorporates cutting down expenses, reorganizing the team, giving the
company and e-commerce boost, and utilizing social media marketing.

Key Growth Highlights of Sugar Cosmetics:

○ The traffic of more than 2 mn unique visitors each month on the company website
and app
○ Sales of 200K+ products each month
○ Products in over 40K retail stores
○ A strong presence on all prominent e-commerce platforms such as Myntra,
Nykaa, Amazon, Flipkart, and more
○ Sugar also sells its products in countries like Korea, Italy, Germany, and the US

The Revenue Model

The last two business years have witnessed an income growth of almost 6 times for
Sugar. 100 crores in annual revenue was a feat achieved by this beauty and cosmetics
brand in just ten years, a mark that was difficult even for biggies like Revlon, which did it
only after 20 long years. This achievement can be attributed to Sugar’s omnichannel
selling approach. Not only does the company focus on selling its products, but it also
works zealously on its content marketing and app development.

FY20 saw a tremendous rise in the growth chart of Sugar Cosmetics. The company’s
operations have increased by 5.6X in the last two fiscal years, with the retail outlets
growing up to 1,750 from 87, only in two and a half years. The pandemic threw a spanner
in the works for most companies in almost every industry; Sugar was also affected.
However, the beauty brand not only managed to stay afloat but also stayed on its success
bandwagon.

Its operating income increased by 82% in FY20, a sharp increase from Rs 57.14 crore in
FY19 to over Rs 103.71 crore, with overseas sales accounting for 15.4% (Rs 16 crore )

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of its revenues. An additional Rs 1.4 crore was generated as revenues from its financial
assets. The revenue increased to Rs 126.36 crore in FY21, with a rise of 22% in its
operating income.

The company’s success is not just limited to Indian boundaries. Its bestselling goods in
the Eyes, Lips, Nails, Face, and Skin categories are shipped worldwide from its state-of-
the-art facilities in Italy, Germany, India, Korea, and the United States.

Making The Right Moves All The Way

The company has garnered a strong fan following among millennials. It holds a brand
image that makes it a cosmetic company with a -breaking attitude. Sugar Cosmetics have
emerged as the cosmetic choice for brave, independent women who are not ready to be
categorised into stereotypes anymore. The beauty brand has carved a niche in the
industry with its unique low-poly packaging and chart-topping products.

FAB BAG is a cosmetic subscription service and another brainchild of Kaushik Mukherjee
and Vineeta Singh. It was started in 2012, and for Rs 599 every month, users get a
“surprise” beauty box that includes a mix of five goods from the categories of cosmetics,
fragrances, bath and body, skincare, and hair care. SUGAR wanted a premium brand
image to catapult its growth by encouraging mass consumers to upgrade themselves and
luxury clients to try something less expensive. FAB BAG gave Sugar the space, place,
and data they needed to figure out this target market.

Premium Products : SUGAR decided to develop a matte eyeliner when the beauty
market was inundated with glossy eyeliners. It was a move to give the customers a
product they could use daily. The product became a bestseller and helped Sugar become
a customer favourite.

Instagram influencers : The ‘unwrapping videos’ and ‘before and after makeovers
helped Sugar create awareness among people about its new products. One of their most

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popular videos features Anmol Rodriguez, an acid attack survivor. Today, the brand has
over 2 million Instagram followers, much higher than its counterparts, such as Colorbar.

Presence in online stores

In 2016, SUGAR debuted on Nykaa, the beauty website. Nykaa was in a nascent stage
then, with a far smaller number of businesses than it does now. Come 2017, sales from
Nykaa accounted for roughly 80% of Sugar’s income. The company scaled its distribution
and went to other online platforms like Flipkart and Amazon.

This beauty startup is expecting a growth of 2X in revenues and targeting a revenue mark
of Rs 300 crore in FY22. Sugar Cosmetics is here to stay and a success story that must
be referred to by every retail brand.

The product, design and branding approach that took beauty brand SUGAR Cosmetics
to Rs. 100 crore in four years.

WHAT SUGAR GOT RIGHT

Fast-forward five years, one of which witnessed a pandemic, and SUGAR is hoping to
close FY21 with a top line of almost Rs. 150 crores. Their journey has several interesting
lessons for anyone launching a consumer brand in India.

1. Product-Persona Fit

The FAB BAG experience gave the team the time, opportunity and data to understand
who their customer was. Beyond demographics, SUGAR’s target customer was vocal,
opinionated, well-informed and in search of instant gratification. These young women
identified neither with the celebrity-driven advertising of the mass brands, nor with the
often intimidating messaging of the luxury behemoths. SUGAR has kept this customer

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persona at the centre of their strategy and this is probably one of the most fundamental
reasons for their success so far.

Given that the company’s growth lay in getting mass customers to upgrade or luxury
customers to try something less expensive, SUGAR needed to establish that it was a
premium brand.

2. Bold Product Bets

Despite a shoestring budget, the team sourced their launch products – a kajal and an
eyeliner – from a reputed manufacturer in Germany. The ‘Made in Germany’ label proved
to be a source of reassurance for customers and helped SUGAR get its initial footing.

The market then was dominated by glossy eyeliners, but SUGAR chose to launch a matte
one, convinced that their customers would be happier with a product they could use daily.
The eyeliner, which went on to become a bestseller, was the first of many product bets
that SUGAR would make.

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3. Thumb-Stopping Packaging

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Like many new brands, SUGAR launched with an all-digital approach. The brief to design
partners Opposite, was to create ‘thumb-stopping packaging.’

Aware that the challenger brand needed to look and feel distinctly different from the
prevailing minimal and predominantly black aesthetic, Opposite designed a bold, graphic
route that employs low-poly illustrations. (Low-poly, derived from ‘low polygon,’ is a
graphic route where simple geometric shapes are used to create angular compositions).

SUGAR’S packaging employs a distinctive approach with low-poly illustrations

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The low-poly approach is versatile enough to go across formats and product ranges

“Rather than equivocate with existing players, we decided to embrace the new dynamic
– the screen was more important than the shelf, the packaging was more important than
the logo.”

Abhisek Sarda, Founder, Opposite

4. Riding the Influencer Wave

The role of Instagram influencers in the marketing of beauty brands is well-documented.

SUGAR too rode the wave of ‘unboxing videos’ and ‘before and after’ transformations to
create awareness.

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The brand’s influencer strategy on Instagram is carefully nuanced. Their most popular
videos include one with acid attack survivor, Anmol Rodrigues. You can spot influencers
with large follower bases like Shubhangi Anand, but videos with micro-influencers are
equally popular.

4. Slaying the Distribution Dragon

SUGAR launched with a store-front on Shopify in 2015, which it still maintains. In

November 2019, the company also launched an app, which has crossed 800,000
downloads and received a 4.6 stars rating across Android and iOS.

SUGAR’s website and app gets more than 2 million unique visits every month, making it
one of the largest digital-first brands in India. The app and site are fairly functional, without
too many bells and whistles, but ~50% of SUGAR’s online revenue is derived from both
these channels together.

The online acquisition strategy still continues to be largely focused on social ads. In 2016,
SUGAR listed on Nykaa, the beauty marketplace, which at the time had considerably
fewer brands than it does today. By 2017, nearly 80% of the brand’s revenue was coming
from Nykaa and the team confesses they didn’t know whether to “be happy or worried.”
Either way it was clearly time to scale distribution.

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The Real Test: Scaling Offline

In the hoopla about ‘D2C,’ young brands often forget that offline channels are critical for
scale in India. Unlike the internet, gaining entry to offline department stores demands
personal networks and feet-on-street. SUGAR was able to crack their first offline entry
into department store Lifestyle, because they set up a team with the relevant connections
and experience. Interestingly, their extensive social following and database, proved to be
an important marketing tool for their first shop-in-shop at Lifestyle, Hyderabad.

“SUGAR ran a focused campaign to reach out to Hyderabad addresses in their database,
inviting them to the opening. On the first day, there was a sizeable throng of young
customers around the SUGAR kiosk, creating that all-important buzz and piquing curiosity
amongst shoppers and other brands alike.

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In February 2019, SUGAR opened its first owned store in Forum Mall, Kolkata, in a space
flanked by M.A.C and Forest Essentials. While the pandemic has disrupted further offline
expansion, by February 2020, 60% of SUGAR’s revenues were from offline channels.

“Any successful challenger consumer brand must undertake a three step journey and
SUGAR is currently on Step Two.

1. Develop a great product and get early adopters through a focused approach

2. Embrace omnichannel and distribute across online and offline platforms

3. Go all out and build brand awareness through mass campaigns”

Kaushik Mukherjee, Co-founder & COO, SUGAR Cosmetics

MARKETING CAMPAIGNS

1) SWEET SPOT

#ShukarHainSUGARHain campaign

Commenting on the launch of the commercial, Vineeta Singh, Co-Founder & CEO of
SUGAR Cosmetics said, “Today, SUGAR is the makeup of choice for all bold,
independent women who refuse to be stereotyped by society’s norms. At SUGAR, we
believe in making beauty fun, accessible and constantly aim at creating clutter-breaking
personas. Both Tamannaah and Ranveer are a dynamic duo that have a meaningful
connect with Gen Z and millennial audiences and resonate with our brand values. We’re
super excited to have them both on board for our #ShukarHainSUGARHain campaign,
allowing our consumers high-quality and easy-to-apply makeup that last through all day!”

2) BoldAndFree Campaign

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SUGAR Cosmetics’ #SUGARxTaapsee #BoldAndFree Campaign is a celebration of the
brand’s philosophy of empowering women to look beyond societal approvals and be
comfortable, confident & bold in their own skin.

FUTURE SCOPE IN ECOMMERCE IN THE COSMETIC

INDUSTRY

1) AI & the VR try-on experience

Buying cosmetics online has always been a challenge because customers are used to
trying hair and skin care products in physical stores. That's why the beauty industry was
one of the earliest adopters of Virtual and Augmented Reality technology to assist
customers in 'trying' products during their shopping journey.

Initiatives like Sephora's Virtual Artist app enable beauty shoppers to 'try before they buy'
using special filters that mimic the wearing of different products. This enables consumers
to get a sense of whether a product is right for them, improving shopper engagement and
lowering return rates.

A study released by try-on app YouCam Makeup found that app users were 1.6x more
likely to buy items and spent 2.7x more with each transaction than non-app users.

In short, AR and VR technologies are helping beauty and personal care brands to bridge
the 'experience gap' between online and offline shopping. 61% of consumers say they
prefer to shop with retailers who offer AR experiences, indicating that there's a lot more
room for this space to grow.

2) Hyper personalization

Hyper personalization is more than just offering customers a birthday discount or

addressing them by name in emails. It's about delivering the right messaging at the right
time. Beauty brands can boost engagement and increase conversion rates by being able
to identify where a customer is in their buying journey and personalize each touchpoint.

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For example, the iconic skin brand ILIA beauty leveraged email automation, sending
customers a reminder to replace products at specific intervals after purchasing. According
to Omisend, these automated email messages had almost double the open rate - 34.26%
open rate in Q1 2020 compared to just 18.86% in 2019 before they personalized them.

Shoppers are showing more interest in personalized experiences designed to serve their
needs and pain points. By adopting hyper-personalization, beauty companies can create
more customer-centric shopping journeys that enhance brand loyalty.

3) Beauty subscription boxes are a growing channel

Subscription boxes have been delighting consumers for several years. They enhance
product discovery and include a much wider product selection that consumers appreciate.
In the beauty subscription space, this trend is seeing the strongest growth.

Beauty subscription brands saw a 20% increase in average order value (AOV) during
2020 - a clear sign that the COVID-19 hasn't dampened desires for the latest and greatest
in beauty.

Here's an example of a box from BirchBox that is famous for delivering a variety of
personal care products for only $15/month.

Beauty subscriptions tap into a key pain point by enabling consumers to try out new
products and brands, without needing to commit to expensive, full-sized versions that
might prove unsuitable.

Birchbox was one of the first beauty subscriptions to present consumers with a winning
combination of convenience and personalization. For just $15 per month, subscribers get
five handpicked samples that match the results of the beauty quiz they complete upon
signing up.

4) Influencers & brand partnerships in beauty

Social media marketing remains one of the biggest tools for beauty brands looking to
connect with their target audience. The intense competition for user attention has led

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many brands to begin tapping into the reach of micro-influencers and brand partnerships
to foster brand awareness across social platforms.

Many cosmetics brands are also leveraging trends in pop culture and entertainment to
find relevance with new consumer segments. Vintage makeup brand Besame
Cosmetics's recent partnership with Disney saw them recreate Mary Poppins' signature
red lipstick, which proved a winner with fans of the brand and the movies.

5) Diversity & inclusion

It's no secret that diversity is an issue for the personal care and cosmetics industries.
From advertising that perpetuates unrealistic beauty standards to products that only suit
certain skin shades, today's consumers are making clear that such exclusivity is no longer
acceptable.

A 2020 study by Business of Fashion and McKinsey & Company found that two-thirds of
consumers consider themselves 'belief-driven buyers', where a brand's values matter just
as much as the products they're selling. Furthermore, 63% of Americanssay they're
inspired by health and beauty brands that show diversity and inclusion in their advertising.

In 2020, Sephora made its '15% pledge' stating that 15% of shelf space would go to black-
owned cosmetics brands to better promote diverse beauty offerings.

6) Artificial intelligence help with product discovery

Beauty brands are increasingly using artificial intelligence to hyper-personalize the

consumer's online shopping experience. Brands like Dcypher Cosmetics use AI in their
manufacturing process to create cosmetic products that match their consumers' skin
tones.

Another brand called YSL launched its Rouge Sur Mesure device, an AI-powered at-home
system that can create thousands of shades of lip color and has refillable cartridges.

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CONCLUSION

Be it SUGAR or Mamaearth, There is a wave of D2C brands, with nearly 800 homegrown
brands operating in the market, as per the data provided by KPMG India. Changing
customer preferences and a move to online shopping have played a big role in getting
these D2C firms to become household names. D2C brands are riding on the bandwagon
of being non-toxic, healthy, and cruelty-free.With focussed spending and a customer-first
approach, brands such as Mamaearth have gained a strong foothold in the MNC-
dominated FMCG segment. Considering the revenue run-rate and expansion strategies
of these digital-first brands, the rivalry is only heating up.

Both these brands are major players in the industry and are selling on affordability, variety,
quality, finest ingredients that are majorly natural and vegan.Their main marketing
strategies that have made these brands widely popular revolve around ecommerce and
social media marketing. marketing campaigns and brand communication is centered
around the promise of using only the best of nature in its products. Out of all the digital
platforms, Instagram and Youtube have worked wonders for them. The brands have been
collaborating with influencers to raise awareness of the brands and their exclusive selling
propositions, as well as to establish credibility amongst product conscious consumers.
They also use majorly famous celebrities as the faces of their respective brands to gain a
sort of trust factor.

Initially, Sugar and Mama Earth were digital-only brands. They used to sell products
through websites and other leading eCommerce partners. By early 2018, they got into
general Trade and large-format retailers in shopping malls and then slowly started
launching exclusive stores. They are trying their best to strengthen their omnichannel
approach in every possible way. Lastly, they are relying on BTL Activities for their further
marketing. Sending direct mails to the targeted audience, organizing trade shows,
telemarketing their products, and targeted search engine marketing are bringing
fruitful results.

Today, their products are available in over 20 countries and they continue to grow at an
impressive rate.

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• https://www.globenewswire.com/en/news-
release/2022/04/15/2423222/28124/en/India-Beauty-and-Personal-Care-Market-
is-Projected-to-Register-a-CAGR-of-6-32-in-Terms-of-Value-Between-2022-
2027.html
• https://www.researchandmarkets.com/reports/5566901/india-beauty-and-
personal-care-market-2022-
2027?utm_source=GNOM&utm_medium=PressRelease&utm_code=zq8n8w&ut
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• https://www.businessoffashion.com/articles/news-analysis/the-year-ahead-the-
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• https://www.indianretailer.com/article/d2c-new-commerce/perspectives/what-
future-holds-for-india-s-d2c-
segment.a7437#:~:text=D2C%20players%20have%20raised%20an,%2C%20Lici
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• https://www.indiatoday.in/india-today-insight/story/how-digital-shopping-is-
transforming-the-beauty-business-in-india-1992006-2022-08-24
• https://inc42.com/datalab/why-new-age-beauty-brands-see-an-online-boom-in-
india-post-covid/

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