India’s Beauty industry is estimated to be valued at $8 billion by 2021. There are a large number of brands that address the skin care and hair care segments. The market was dominated by cosmetics majors for decades till the arrival of E-commerce and Direct to Consumer (D2C) selling.
SUGAR Cosmetics is one of the leading cosmetic brands with its headquarters in Mumbai, India. It has become one of the leading brands among consumers by selling products in most Indian tones.
It is fast becoming the go-to option for consumers in tier 1 and 2 cities. The brand is focused on making products that are cruelty-free, focusing on content marketing, and developing its own app, among many other initiatives.
The brand refuses to categorize itself into any stereotype. Thanks to its distinctive packaging, awe-inspiring products, and clutter-breaking attitude.
Vision and Mission Statement:
“We are a brand that believes in empowerment. That’s why we curate products from around the globe which meet every want and need there could possibly be when it comes to your makeup and skincare regime. We believe in every interpretation of beauty. Bold to subdued, quirky to crazy, every day to the glam goddess! Our aim is to celebrate every aspect of you, no matter what your style is. It’s time to rule the world, one look at a time”.
Founders and Management Team:
In 2012, Kaushik Mukherjee and Vineeta Singh founded a beauty subscription known as FAB BAG. For Rs. 599/- subscription, they would send subscribers a “surprise” beauty box with a mix of five products such as make-up, skincare, bath and body care, haircare, fragrances, etc. The products were globally sourced and mostly included new and unknown products. SUGAR was just their in-house brand.
The FAB BAG was doing well but the subscriptions slowed down. They took the plunge and launched SUGAR Cosmetics in 2015.
Vineeta Singh, the founder, and CEO has completed engineering at IIT Madras and MBA from IIM Ahmedabad. She is a triathlon and ultramarathon runner and also a TEDx speaker. She is now a household name after appearing as a judge in the popular show ‘Shark Tank India’.
Kaushik Mukherjee, the Co-founder has completed engineering from BITS Pilani and MBA from IIM Ahmedabad. He is also a marathon runner, a TEDx speaker, and an Ironman triathlete.
Logo and Tagline:
The brand started as an online retailer of natural and paraben-free make-up cosmetics. The company’s logo is composed of a wordmark with an emblem, which is also used as the brand’s signifier and placed on all the make-up items the company produces.
The emblem of the cosmetic retailer is composed of a solid black circle with a classily curved bold letter “S” in white. The symbol looks like a luxury seal or a quality mark, reflecting a sophisticated brand, and showing that organic and natural cosmetics can also be high-end.
The Tagline is “Rule The World, One Look at a Time”.
Funding and Investors:
Sugar Cosmetics has raised a total of $21 million through 3 funding rounds. The latest funding was raised on October 21, 2021.
| DATE | INVESTORS | AMOUNT | ROUND |
| Feb 2013 | India Quotient | $500k | Seed |
| Aug 2017 | N/A | N/A | Seed |
| Jan 2019 | A91 Partners | $9.8m | Early VC |
| Oct 2020 | Stride Ventures | $2m | Debt |
| Oct 2021 | A91 partners, India Quotient, Stride Ventures, Elevation Capital. | $21m | Series C |
| Total Funding | $21m |
Products and Services:
SUGAR cosmetics was established from the desire to bridge the gap between providing world-class quality color cosmetics and make-up pigments that suit Indian skin tones. It was not just about selling color cosmetics but building a distinctive individuality for the brand.
The initiative was to offer branded products that last from morning to night because India generally has a hot climate. There were various ranges of products and brands available that were perfect for, say, caucasian skin, but wouldn’t work for Indian skin tones.
The brand did not restrict itself to only online platforms, it is also making its presence felt in retail stores. SUGAR cosmetics operates in more than 130 locations in India and has a presence in more than 10,000 sales outlets. The products include a wide variety of lip care, skin care, body care, makeup accessories, etc.
Market Analysis and Strategy:
SUGAR cosmetics is expecting to grow 2X in revenues and cross the Rs. 300 Crores mark in FY 2022. Their journey has several interesting lessons for anyone launching a retail brand in India.
- The FAB BAG experience gave the team the opportunity and data to understand customer opinions. Beyond demographics, SUGAR’s target customer was vocal, opinionated, well-informed, and in search of rapid gratification. SUGAR has kept its consumer persona at the center of its strategy and this is probably one of the reasons for its success so far.
- The team took some bold product bets since their initial launch products – an eyeliner and a KOHL pencil from a reputed German manufacturer. The market was dominated by glossy eyeliners, but SUGAR chose to launch a matte one, convinced the customer would be happier with a product that can be used daily.
- SUGAR launched with an all-digital approach. The brand was aware that it needed a new look and feel specifically different from the prevailing minimal and predominantly black aesthetic. Their aim was to create “thumb-stopping packaging”. They choose a bold graphic route that uses low-poly illustrations for their packaging.
- While offline retail presence is no doubt important in this space, the focus should be on building an influencer network that would hold the brand in good stead even when selling offline. The role of Instagram influencers in marketing has been well-documented. SUGAR too rode the wave of ‘unboxing videos’ and ‘before and after’ transformations to create its brand awareness.
Financial plan:
The beauty and skincare regiment took a hard hit during the COVID-19 pandemic as buying preferences swayed towards essential products. The corporation devised strategies to reinforce the trust connection between the brand and the customer.
The brand managed to clock Rs. 100 Crores in annual revenues. This was a difficult achievement even for brands like Revlon, which was only able to reach the same revenue mark in 20 years.
The company had operating revenues of Rs. 126.4 Crores during FY21 as compared to Rs. 103.71 Crores in FY20, according to the company’s annual financial reports.
Revenue Breakdown:
| SUGAR revenue | FY21 | FY20 |
| Sale of goods in India | Rs.117.61 Crore | Rs.87.70 Crore |
| Export sales | Rs.8.74 Crore | Rs.16 Crore |
Expenses Breakdown:
| SUGAR expenses | FY21 | FY20 |
| Cost of cosmetics consumed | Rs.42.60 Crore | Rs.42.63 Crore |
| Advertising promotional expenses | Rs.34.36 Crore | Rs.28.43 Crore |
| Employee benefit expenses | Rs.19.20 Crore | Rs.12.70 Crore |
| Outsourced support and labor costs | Rs.22 Crore | Rs.19.20 Crore |
| Other operating and admin expenses | Rs.21.96 Crore | Rs.21.96 Crore |
| Freight and Packaging | Rs.8.80 Crore | Rs.7.10 Crore |
The total expenses increased by 18.2% during FY21.
Financials
| FY21 | FY20 | |
| Revenues | Rs. 126.36 Crore | Rs.103.71 Crore |
| Expenses | Rs. 149 Crore | Rs.126 Crore |
| EBITDA Margin | -11.98% | -14.38% |
| Profit / Loss | Loss Rs. 21.1 Crore | Loss Rs.28.23 Crore |
SUGAR Cosmetics is likely to grow its top line by over 2X and cross Rs. 300 Crores revenue mark in the FY22. At a time when most retail and e-commerce companies are still figuring ways to deal with the impact of the COVID-19 pandemic, SUGAR has managed to grow by 60% from its pre-lockdown numbers.
Partnership and Acquisitions:
Acquisitions:
ENN Beauty: Vellvette Lifestyle Pvt. Ltd., the parent company of SUGAR cosmetics, acquired a 51% stake from natural skin and hair care brand ENN Beauty on January 13, 2022. With this acquisition, ENN will be able to leverage 50 million beauty enthusiasts, which will help them raise its retail presence to 100+ outlets by the next financial year.
Competitors:
SUGAR Cosmetics is one of the leading brands in the beauty industry. It has many strong competitors. Some of them are listed below:
- Nykaa
- Purplle
- Lakme
- Mamaearth
- Myglamm
- Plumgoodness
- Lotusherbals
- Kay beauty
- Faces Canada
- M.A.C. Cosmetics
Future Plans:
The journey of SUGAR Cosmetics is different from other brands. Starting as an online brand and staying as an online-only brand for two years and then venturing into offline retail resulted in growth at a faster rate.
SUGAR Cosmetics is planning to increase its retail stores from 130 outlets to more than 150 outlets by the end of the financial year 2023.
The brand also wants to expand its business outside India. It already has retail stores in Russia and USA. It will also focus on expanding its mobile-based application, which already has 1 million + subscriptions in just one year.
The beauty and cosmetic market in India is currently valued at $26.8 Billion and is expected to reach $37.2 Billion by 2025.
The industry is witnessing a boom due to changing perceptions, growing awareness about natural ingredients / chemical-free products, and most importantly the rise of direct-to-consumer (D2C) making waves in the online retail space. To conclude, technology and innovation will be critical to success in this industry.
FAQs:
Is SUGAR Cosmetics an Indian brand?
Yes, SUGAR Cosmetics is an Indian company.
How did Vineeta Singh start SUGAR Cosmetics?
Vineeta Singh along with her husband Kaushik Mukherjee focused on creating makeup products solely for Indian skin tones and targeting the audience of age group from 20-35 years.
What is sugar cosmetics’ net worth?
SUGAR Cosmetics’ net worth is more than Rs. 750 Crores.
Is SUGAR Cosmetics a Korean company?
No, It is an Indian company.
Is SUGAR Cosmetics made in China?
SUGAR Cosmetics website states “Manufactured in state-of-art facilities across Germany, Italy, India, USA, and Korea.
Who is the CEO of SUGAR Cosmetics?
The CEO of SUGAR Cosmetics is Vineeta Singh, and also one of the founders of the company.
Who is the brand ambassador of SUGAR Cosmetics?
Bollywood celebrity, Taapsee Pannu is the brand ambassador of SUGAR Cosmetics.
Who is the manufacturer of sugar cosmetics?
Manufactured in state-of-art facilities across Germany, Italy, India, the USA, and Korea.
Does SUGAR Cosmetics test its products on animals?
All products are 100% cruelty-free and not tested on animals.
