Varun and Ghazal Alagh built a D2C personal care business due to parental stress. Mamaearth now clocks a turnover of Rs. 700 crore.
When Varun and his wife Ghazal Alagh were unable to heal their infant son’s skin condition with products accessible in the Indian market, they looked deeper. It was discovered that the Indian market was swamped with generic products that were contaminated with poisons and hence could not be used on newborns. Despite the fact that the couple was eventually able to meet their demand by ordering “appropriate” materials from the United States, which was a “inconvenient arrangement,” they remained involved in the issue statement.
Ghazal explains, “We learned that several poisons that were banned in countries other than India and determined to be detrimental to newborn skin were nonetheless commonly utilised here. That is what prompted us to believe that something should be done about it.”
Further discussions with their friends and family revealed that many parents were dissatisfied with the quality of products offered in India. That is what solidified the couple’s choice to launch a business in this field.
The duo was ready with six infant items, including lotions, rash creams, shampoos, massage oils, body wash, and diapers, backed by scientific research and persistent gamma testing with a small focus group of mothers, including Ghazal herself.
The objective was straightforward: to provide natural and toxin-free products for infant skin while also assisting new parents in relieving stress.
Mamaearth made its formal debut in December 2016 and became a D2C sensation in less than five years and is one of the fastest-growing brands in India’s FMCG sector.
It has evolved from six goods to 140-odd SKUs in the baby care, skincare, and haircare segments, and has served over five million people in 500 cities.
Mameartth generates money through its own direct-to-consumer platform, ecommerce marketplaces such as Amazon, Flipkart, and Nykaa, and offline channels. According to an analyst analysis by Jefferies, the Gurugram-based firm crossed an annual revenue run rate of Rs 700 crore ($100 million) in FY21. Despite the fact that Mamaearth began with baby care, the vertical now accounts for only 20% of its revenue, with the remainder coming from skincare and haircare.
During its Series C round of $50 million led by Sofina Ventures in July, the company was valued at $730 million. Mamaearth’s supporters include Sequoia Capital India, Fireside Ventures, Stellaris Venture Partners, Sharp Ventures, and Titan Capital, and company has raised almost $75 million to date.
What did Mamaearth do well that allowed it to break into an incredibly competitive and primarily offline personal care business and quickly become a multi-billion-dollar brand?
Ghazal said, “Mamaearth looked at whether it could fix a problem for even 500 customers. The process of innovation is not as complex as it appears. You can start with a small production batch of 4,000-5,000 units and see how people react. You can then decide how your innovation funnel will appear based on that. This offers us the ability to innovate more quickly and cater to specific markets. We learned what the consumer was searching for using listening methods, rather than stating ‘see, this is the market size and this is the percent share we’ll acquire.”
Mamaearth’s success is built on listening-based innovation and a consumer-first strategy. This is what has given the company the growth momentum over the last four years.”
Ghazal explains,”Because consumers recognise that this is one company that is paying attention to them. What brands should focus on is why the consumer should buy from them rather than what they should buy from them.”
Mamaearth’s ‘why’ was obvious from the start. It is now Asia’s only MADE SAFE-certified brand. (It is a non-toxic seal for personal care goods.) In addition, a category leader in the D2C personal care area is taking on incumbents. Mamaearth now has over 140 SKUs in baby care, haircare, and skincare.
Mamaearth’s goal is to create a “brand for and by parents. It believes that in order to compete in the “aggressive” and crowded D2C arena, brands must establish personal ties with consumers in order to persuade them to buy items for “emotional reasons.”