By the end of FY21-22, makeup retailer Sugar Cosmetics hopes to generate Rs 300 crore in revenue, up from Rs 100 crore in FY2019–20. This discovery occurs at a time when the beauty and skincare market is flourishing, fueled by rising consumer demand and the convenience of online shopping. Through its most recent acquisition, the Mumbai-based company is also entering the hair care market, and it aims to test between 14 and 22 stock-keeping units (SKUs) in the last quarter of FY22. About 60% of the brand’s sales come from lipsticks, which are top sellers. But during the past six months, according to Vineeta, face items have made up about 45% of sales. IIM-Ahmedabad graduate Vineeta and her husband Kaushik Mukherjee founded Sugar Cosmetics in 2015, which offers foundations, lipsticks, and other cosmetics through physical stores and online.
Income from Different Revenue Streams at Sugar Cosmetics
Sugar Cosmetics derives its revenue from a variety of sources, such as the sale of its goods through online and offline channels, license agreements, and joint ventures with other companies. The sale of cosmetics, particularly lipsticks, the brand’s star item, generates the majority of its income. In order to strengthen its footprint in India’s Tier II and Tier III cities, Sugar Cosmetics has also been expanding its distribution channels. To increase its presence in stores, the business has worked with well-known merchants like Lifestyle, Shoppers Stop, and Nykaa. Additionally, Sugar Cosmetics has been concentrating on its online store, which is a key factor in the brand’s success.
Sugar Cosmetics’ Increase in Popularity in the Beauty Sector
One of the fastest-expanding beauty brands is Sugar Cosmetics. The brand’s distinctive marketing tactics, active social media presence, and cutting-edge product offerings are to thank for its success. By promoting its products and raising brand recognition on social media sites like Instagram and TikTok, the company has developed a strong relationship with its target market, which is predominantly made up of millennials and members of Generation Z. Sugar Cosmetics has also been able to set itself apart from its rivals by providing a selection of premium, vegan, cruelty-free goods at a reasonable price. This has made it possible for the brand to appeal to a variety of clients searching for high-quality goods that are also socially and morally responsible.
Opportunities and Challenges: Sugar Cosmetics’ SWOT Analysis
Strengths:
Strong customer loyalty and brand reputation
An array of products with a variety
Extending the reach of retail
Weaknesses
Competition in the cosmetics market is fierce.
Dependence on lipstick sales as a major source of income
Reliance on home market to generate revenue
Opportunities
Exist in India’s expanding cosmetics business.
Demand for natural and organic cosmetics is rising.
Entry into new markets abroad
Threats
Including market turbulence and economic downturns.
Rising prices for raw materials
Adapting consumer tastes
D2C, or direct-to-consumer, is an option.
Going direct-to-consumer and avoiding a marketplace like Amazon, in Vineeta’s opinion, was Sugar’s finest move. According to her, nobody pays the new kid on the block the attention they merit; that attention is something you grab. Third-party platforms would not help Vineeta achieve her goals of controlling Sugar’s narrative and interacting with customers through her own platform. It’s true that at one point Nykaa accounted for 80% of Sugar’s revenue, but the company never gave up on its own D2C engine.
With her own platform, Vineeta hoped to direct Sugar’s story and connect with customers in a way that third-party platforms could not. Although at one point Nykaa accounted for 80% of their earnings, Sugar never gave up on their own D2C engine.
Way to victory
Being a consumer insights expert, Sugar filled the void by introducing products created in India, specifically for Indians. Vineeta described in detail how sugar was produced for women on the go in her interviews with YourStory. These women included travelers, hustlers, and the new Indian working clan, who spent most of their days outside the home and didn’t have time to touch up.
TV for general branding
We have our own retail outlets and an eCommerce channel as well, he said, explaining how his company is an omnichannel brand with a presence in both traditional and modern trade. The majority of our marketing expenditure goes to TV, but not for direct-to-consumer sales; rather, it serves to represent the company as a whole. “You keep spending money on advertising and promotion as long as you see a return on your investment. We have intended to spend gradually while learning what works and what doesn’t for our products rather than making long-term expenditures, says Sikaria.
Future Prospects: Estimates of Sugar Cosmetics’ Net Worth Over the Next Few Years
Despite the challenges the Indian cosmetics industry is facing, Sugar Cosmetics is well-positioned for growth in the next years. The company’s revenue growth is expected to be fueled by a strong consumer perception of the brand, a wide range of product offerings, and expanding distribution possibilities. Sugar Cosmetics, which has already released a variety of products in this category, has a significant development opportunity due to the growing demand for natural and organic cosmetics. The company will probably draw a wider consumer base and boost its revenue streams as it continues to innovate and diversify its product line. Long-term sales development for Sugar Cosmetics is additionally anticipated to be boosted by the company’s entry into overseas markets.
Conclusion on Sugar Cosmetics
Sugar is investing heavily in content and retail. They are preparing to open more than 60,000 shops nationwide, some of which will be outside of India, as well as expanding their search for young influencers who can increase their TOF.
FAQs about Sugar Cosmetics
By 2024, Sugar Cosmetics hopes to become the second-largest brand in the color cosmetics market and achieve profitability with 70% growth.
Sugar has a 300 billion rupee net worth.
The co-founder of SUGAR Cosmetics is well-versed in all aspects of brand development. Vineeta Singh, the Shark Tank’s most popular judge in India, has achieved success in part because of her heart-centered leadership style, as well as her array of skills and perseverance.
Like Nykaa, SUGAR is a successful female-led firm with a significant physical presence (more than 100 own stores in addition to being accessible at 35,000 contact points across 500 cities), and it is getting close to unicorn status after being valued at more than half a billion dollars.
Over the course of 6 rounds, SUGAR Cosmetics has raised a total of $87.5M in investment. Their most recent funding came from an angel round on September 3, 2022. Nine investors are funding SUGAR Cosmetics. The most recent investors are A91 Partners and Ranveer Singh.
