With a plethora of brands entering the organic beauty market, consumers today are spoiled for choice, but Vivek Sahni, founder and CEO of Kama Ayurveda is unfazed by the surge of competition in the segment.
Sahni, whose company has been in this segment since 2002, long before ‘clean beauty’ became the in thing, believes that while it is easy to launch clean or organic beauty brands, only products with proven efficacy will find takers and survive in the long run.
“We know how easy it is to make a clean beauty product, especially if you are from India. You head to the kitchen, mix besan (gram flour), Chandan (sandalwood) with rose water and you have a face pack ready,” Sahni told Moneycontrol in a conversation.
With the lower entry barriers today due to e-commerce, said Sahni, it has become easier to launch a clean beauty brand, but consumers over time will become more discerning about the effectiveness of these products.
Clean beauty rush
The market for clean and organic beauty products has exploded of late with a spate of new launches as brands old and new vie for a share of this market. Start-ups like Mamaearth, WOW Skin Sciences, Plum Goodness, Juicy Chemistry, FMCG behemoths like Marico also have shown a keen interest in this space.
In July, Marico bought the majority stake in direct-to-customer ayurvedic company Apcos Naturals, which makes hair and skincare products branded Just Herbs. It is also positioning its brands Coco Soul and Pure Sense, in this segment. Lotus Herbal, a major player in the mass personal care segment, launched Lotus Botanicals this year.
Kama Ayurveda, Forest Essentials and The Body Shop are some of the oldest players in the segment catering to premium target group. Biotique, Himalaya Wellness are some other old companies operating in it.
A report released by Avendus Capital last year projected that by 2025 beauty and personal care will be a $30 billion market in India. Of this, direct-to-consumer brands will command $10-15 billion. Clean beauty will account for 10-15 percent of this market, as per industry estimates.
To stand out in this clutter, Kama Ayurveda has started clinical trials of its flagship products as well as new launches, Sahni said.
“What differentiates us from these brands is that we are doing clinical trials to show our consumers how effective our products are instead of just saying that our products are effective,” he adds.
Strategy rejig
Despite renewed interest from the consumers in clean beauty, Kama Ayurveda has been struggling with sales due to the restrictions on the opening of its offline stores as the pandemic drags on. The struggle is more pronounced for the company as about 90 percent of its stores are in shopping malls, which have been the first to close and last ones to open during the lockdowns. Overall, it has 59 stores in the country.
To address this situation, the company, like many of its peers, has turned to e-commerce.
“We have been able to turn the company from being a brick-and-mortar company to an e-commerce driven company,” said Sahni.
The company over the last year has strengthened its back end, pushed digital marketing, and hired more people for e-commerce. As a result, today, it claims to get about 80 percent of its sales through the channel as compared to 25-30 percent in the pre-pandemic period.
While Sahni expects the momentum to subside from the channel as normalcy returns, the company will continue to focus on the digital domain but it will maintain its physical presence.
“Consumers like to shop online but from time to time they like to visit stores for the kind of shopping experience they offer, and hence we will keep our outlets while building our digital presence,” he added.
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