Indian D2C beauty and personal care brands have become the darling of VCs.

October 27, 2021
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Direct-to-Consumer (D2C) beauty and personal care brands are booming in the Indian market, and Investors love to be a part of it. The traditional method of selling the products through an intermediary has been outdated, and the modern way of dealing with the products on a digital platform is worth using.

The Direct-to-Consumer are more trending to cover the market. Even it took a good shape during the pandemic, and D2C started to hold the market needs.

Some of the brands used most by the audience in the last few years are Mamaearth, Plum, MyGlamm, Nykaa, Wow, and Skinkraft.

As per the Praxis Global Alliance (PGA) Labs and Knowledge Capital report, most of the investors (54%) have jumped in investing in beauty brands. Around 1.4 billion has been flourished in to Direct-to-Consumer brands.

Interestingly, Direct-to-Consumer has covered 80% of India’s cosmetics, personal care, and beauty products.

The fun fact is that Juicy Chemistry, a skin, and personal care brand, has made USD 6.3 million of the market. The beauty brands use such capitals to enhance their growth of the brands, according to Economics Times. Juicy chemistry deals in organic products for hair, face, and body. Such means are used to expand the business, reach new localities, hire candidates to fulfill the target, and help in flourishing the products more into the market. The Juicy brand’s demand is capturing both international and domestic markets.

With the growth of digital platforms, VCs demand to return the interest as soon as possible.

Market and the brand Potential

In the next five years, the beauty and personal care brand has grown to USD 4.4 billion, and by 2020 it was USD 1.06 billion as per Avendus Capital firm report.

The net growth of personal care and beauty brands by the Final year 2025 is up to USD 27.5 billion, and the same in FY 2020 was USD 18 billion. The massive growth in the beauty market has made the business reach its pinnacle.

The D2C beauty and personal care brand have touched the height in terms of business and capital growth. They also give importance to the business model and its innovation to grab the market and the targeted audience’s needs.

These days with the growth of digital platforms, the D2C investment is more reliable and effective to serve the requirements of the consumers.

Brand Calibre and its value

The Indian market was dominated by a conventional method. But these days, the D2C has made the market more renowned and replaced the pattern in dealing with the consumers. And customers are more attracted to personalized products and are more concerned for their skin and personal care.

The demand from the targeted audience is increasing more on body scrubs and serums, and the D2C is trying to reach these brand approaches without any hindrance.

Beauty and personal care brands are reaching the mind of the people and breaking the silence to get benefit out of it. These brands are making customers more reliable and exploring the audience’s further needs to add to the list.

These days consumers are more in using toxin-free and organic brand products for the skin’s well-being and in taking personal care. The better the quality of the beauty products, the better the use of the same by the audience.

The D2C has given importance to product innovation and utilizing the Online gateway in a significant way. D2C brands come with their product every 3-6 weeks and catch the market needs, whereas traditional methods come with their product after every year. That makes a massive difference in focusing on the technique, and people choose D2C wisely and in a significant way.

Avendus estimates that there will be 135 million online beauty shoppers by FY 2025, and in FY 2020, there will be 25 million online beauty shoppers. According to multiple industry reports, the number of online shoppers in South Asia is projected to reach 330-350 million within the next five years.

The Avendus report states that D2C brands have flourished due to product and price white spaces, new business models, and growth capital. Moreover, these new firms are successful because they have solid brand propositions, agile DNA, asset-light operations, and plug-and-play supply chains.

This category of D2C startups has one of the highest product margins in the industry, about 70%–also making them an obvious investment choice.

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