Founded by Vineeta Singh and Kaushik Mukherjee in 2015, SUGAR Cosmetics is today one of India’s fastest-growing beauty brands and has grown into a go-to brand for women for everything makeup. The company that started out as a Direct-to-Customer brand now has an extensive omnichannel presence reaching every nook and corner. SUGAR cosmetics are available across more than 45,000 multi-brand outlets spread across 500+ cities in the country!
However, something that not everyone knows is that before SUGAR, 11 years ago the husband-wife duo ran a successful beauty subscription business called Fab Bag. SUGAR came into existence with the founders’ aim to work on a model that eliminated middlemen and with their passion for building a brand for women. Realizing the power of going digital enabled the founders to formulate SUGAR and present it to the consumers.
Closely working as a subscription box, the brand was able to sample its products before offering full-size products for the consumers. “Although skincare is a larger category, makeup would make or break a month’s box, and since the audience used to view us on their phones, we got a lot of traction on social media. While skincare dissolves, makeup acts like lights of pixels on the screen,” stated Kaushik Mukherjee, Co-Founder and COO, SUGAR. Mukherjee further believes what worked for the brand was ‘sampling’, since it’s the products consumers believe in before entrusting a brand.
Content to Commerce
While content to commerce plays a significant role in a brand’s growth, Mukherjee believes that the said strategy works only if the products are accepted by the consumers. With the advent of technology, the audience is smarter and thus looking for products that are viral for the right reasons. “For the longest duration, we invested heavily in our products — product packaging and value pricing. This is what allowed us to stand out in the market and go up the ladder,” he added.
However, the brand invested in content once they realized the recurring shift in attention from television to social media, and they began to heavily invest in writers to generate specific content for different social media platform.
The Boon of Data
Being an omnichannel brand with an extensive social media presence, SUGAR has cracked the right way of utilizing customer data to offer them what they desire without violating their trust. “Data is very important for every brand; however, we need to be very sensitive about the data that we seek,” asserted the Co-founder.
While data acts as a goldmine, Mukherjee emphasizes that the consumers must be given a valid reason to gain access to their data, since SUGAR believes that it is not only about acquiring new customers but engaging them for a lifetime.
“Every start-up brand while they are scaling or growing aims to be taken seriously and be treated at par with the already existing large-scale brands,” Mukherjee added. Thus, the zeal to be at par with the larger brands persuaded SUGAR to go omnichannel and open its first store. Not only did the store do well in terms of business, but promoting the same via social media platforms spread the word, establishing SUGAR as one of the big cosmetic brands.
Having around 186 stores and breaking even, Mukherjee believes that being omnichannel has been profitable for the brand. He explained, “Beauty as a category has a value-to-volume ratio, allowing us to pack a lot of products in a small 250 to 300 sq ft store. That is when we realized that if you pack enough products if you are in a mall that gets you decent footfalls, and you have great gross margins, this can work.”
Recipe for Success
SUGAR was incepted at a time when the brand had enough funds for at least the next 2 years, which allowed it to focus on the product and its quality, making it much more user-friendly in comparison to its competition. India is a country wherein a niche market today becomes a large market tomorrow. Believing this formula, SUGAR heavily invested in niche marketing hypothesis, creating a space for themselves and offering products for the said niche.
With the growing number of D2C brands, it is inevitable that the brand might do a big part of its business via its own website. However, according to Mukherjee, the same is not profitable owing to the custom acquisition cost, which is why it is smarter to test out different third-party portals.
“For two years, whatever money we made on the third-party portal, we used to balance that out with whatever we used to invest in our website, till we reached a certain scale. Then once the funding happened, we could attempt retail,” said Mukherjee.