Mamaearth and Nykaa, both founded by women, share a common trait beyond that. These homegrown Indian brands have successfully penetrated the market dominated by international conglomerates. The success of these direct-to-consumer powerhouses goes beyond surface level. As an impressive growth and profitability company, they are revolutionizing the beauty and personal care (BPC) industry. In addition to the unwavering determination and resilience of their co-founders, these two businesses are able to attract new internet users and novice beauty enthusiasts. As someone who has interacted with the Alaghs and Nayars personally, I have been privileged to witness their remarkable journey.
The recently revamped Mamaearth and Nykaa are creating a stir in the beauty industry.Both Mamaearth and Nykaa have made significant progress in recent times. For instance, while Mamaearth has successfully entered the stock market and is now planning to expand globally by utilizing our traditional ingredients, Nykaa’s Q2 results have been impressive. They have recorded a 50% increase in their net profit and a 25% growth in gross merchandise value. Apart from beauty products, Nykaa has also started offering fashion and electronic-business-to-business items. In order to cater to consumers of different types, both companies provide a diverse range of products In addition, they have also brought attention to Indian beauty brands that may have been overlooked previously despite being around for many years. Furthermore, both companies have managed to secure shelf space in stores nationwide that was typically reserved for foreign brands.
In India’s online beauty market, Nykaa leads with a 38% share, while Mamaearth holds 5.4%, as reported by Redseer. However, labeling them solely as internet-based companies would be unjust as they have also established a strong presence in offline retail. As the overall beauty market is projected to surpass billion in the near future, it’s safe to say that these two firms are only starting to tap into their full potential.
In an increasingly Westernized market, Nykaa and Mamaearth have managed to hold their own and add the tricolour. Nykaa and Mamaearth scaled and gained market share through carefully arranged endorsement deals with celebrities and influencers and digital marketing arrangements with Google, YouTube, and Instagram, according to the strategy experts. Taking a step back, let’s consider the market they were trying to capture.
As these businesses experienced steady growth, it was only when consumer preferences shifted that they were truly able to progress. Whether attributed to the Jio phenomenon or the evolution of Indian consumers, the market began to diversify into specific segments. The younger demographic in India eagerly embraced ‘Hallyu’, also known as the unstoppable trend of Korean pop culture, and tapped into a wealth of international content, particularly in the beauty industry. This led Indian customers, particularly females who make up over 60% of Nykaa’s customer base, to realize that their unique skin and cosmetic requirements could not be satisfied by a universal solution.
It was an opportunity both of these companies jumped at. Through engaging content, customers learn about their needs, become informed customers, look for products that meet their needs, and use content again to discover new products. Both of these companies adopted this flywheel, but it isn’t the only one. Zerodha, for instance, has mastered the flywheel in order to become India’s largest discount broker.
“Curious about its effectiveness in dismantling the stronghold? Let’s revisit how young Indian consumers are uncovering their individualized desires – a trend that is gaining traction globally. This awakening has also reached companies in the West, but to reach these new Indian buyers, they must comprehend their behaviors. While a majority of this emerging customer base consists of internet-savvy 20-something women from major cities, there is also a considerable number hailing from tier 2 and 3 cities.”
Product discovery for these women takes place on the internet, while transactions often occur offline. To establish a stronger presence, major western brands must focus on their online presence and utilize the data collected to expand into offline stores. Due to India not being their home market, many of these brands are taking a slower approach and choosing to remain on popular platforms such as Amazon, Flipkart, and Nykaa rather than creating their own channels. This provides companies like Amazon and Flipkart with the chance to lessen the control that big beauty brands have over Indian consumers.
In the future, as the two companies build and expand, they will be able to chip away at the competition more and more. As the two companies establish themselves as options in the minds of customers, they will need to spend less later to keep them loyal. Beauty businesses compete over customer loyalty. It isn’t about getting them to buy one product, it’s about getting them to keep buying that product and more from your library. That’s where the house of brands theory comes in.
Mamaearth’s parent company, Honasa, acquired BBlunt salons and Dr Sheths, while Nykaa acquired a number of brands, such as Pipa Bella, Dot & Key, 20Dresses, and Earth Rhythm, among others. With 26 private labels, Nykaa has become the house of brands. Honasa has built its own set over the years. This will reduce customer acquisition costs and increase margins. Everyone loves a larger margin.
As the trend of making in India for the world gains popularity, companies such as Nykaa and Mamaearth will lead the way in creating global products that are recognisable. Although the companies’ stock price may have been renewed after their public listing and quarterly results, they are more than their stock price.