"Advertising on TV will establish us as a credible brand": Kaushik Mukherjee, SUGAR Cosmetics

SUGAR Cosmetics launched its first television commercial last month. Though the brand did not have a mainstream media presence until then, it still managed to create a space for itself through its influencer marketing and makeup tutorial posts on social media. It helped the brand cement its position in people’s minds and firmly establish it as a strong competitor to other established brands.

So, why did the brand start advertising on television now? In a chat with afaqs!, Kaushik Mukherjee, co-founder and COO at SUGAR Cosmetics, says that television advertising will establish it as a credible brand and also help it to expand its TG beyond the digital millennials.

“When we're seen in the same slot as other legacy brands like L'Oreal, Lakme or Maybelline, we're seen as a brand that can be trusted. So, this is a subtle way of building trust. They have seen us online, they have followed our YouTube and Instagram tutorials, and now we're on television. We're converting the TG we already speak to. They've never thought of us as a comparable brand with the ones they typically choose. With this we'll also expanding the TG,” he mentions.

SUGAR Cosmetics will continue to engage with the digital-first millennials on its social media platforms. But, through the TVC, it will reach the larger population, who aren't on social media and those who aren't targeted through the ads. Its core messaging is targeted at women in the age group of 18 to 35 year olds.

Even among those who engage with it on social media, many still remain wary of it being a trusted brand. Television will lend that credibility to it.

They will also be advertising in print for building awareness, and to drive footfalls into the stores.

While the brand didn’t initially advertise on television due to the high cost involved, its TG was also quite different from that of the legacy brands that were using this medium.

“India was seeing a resurgence of a new kind of consumer base. The kind who wouldn't trust celebrity endorsements. There was a rise of short format content on YouTube and Instagram that drastically reduced the time taken to consume content. We were born in the middle of this wave. Our audience wasn't watching television. They were digital natives, who would rather trust an influencer or their peer group with their choices. It was important for us to align with them,” Mukherjee adds.

After the third year, the brand could have set aside some budget for television. But it decided to keep addressing the upwardly mobile, digital-first natives with its content. It classifies its content into two buckets - educational and entertaining.

“Makeup, as a category, remained inaccessible for the longest time. If you see it continuously on actresses and stars, then somewhere you believe it is not for you. But with the explosion of content on social media, you could now see even people from the same neighbourhood wearing those products, enticing you to try them,” Mukherjee informs.

But once enticed, how do they use those products? Because, unless they know what to do with them, why would they purchase them, even if it came at a massive discount?

“This is where we're building in this category. Many platforms, like YouTube and Instagram, where our target audience spends time on, play very well with beauty. Hence, our strategy was, instead of pushing sales, to consistently focus on educating and entertaining the customer,” Mukherjee says.

This means that the social media team doesn’t have sales targets, but targets of views and impressions.

“What makes SUGAR seem like it's been a part of people's lives, even without a television campaign, is probably that we try to be long term and deliberate about our choices. We try to explain and consistently talk about why it should be a part of your life. And, that isn’t a sale and discount. That’s where our communication is different from the others in the industry,” he adds.

Despite the pandemic having an adverse impact on all businesses last year, the brand witnessed a 60 per cent growth over its pre-lockdown numbers. Launched as a digital-first brand in 2015, it also witnessed tremendous growth in their physical presence expanding to 69 stores, with at least 45 per cent of the sales coming from there. It proposes to increase them to 100 by the end of the year.

“Our kiosks were able to break even at an operational level in four months. And that is because the amount of space required for a product compared to its price is quite less. A $10 lipstick will require very little space. So we could pack a lot of products inside even a 64-sq.ft. kiosk that is in the middle of the mall walkways. Our initial rollouts were kiosks which were far more economical to open, and they broke even within three to four months,” he says.

They then decided to aggressively open more stores as it gave them the confidence that customers will walk up to stores and the trials may lead to purchases. Also the pandemic had taken a toll on real estate and landlords were willing to reduce the rents by about 25 to 30 per cent.

Of the 55 per cent sales coming from the online space, half comes from its own website and the other half from other e-commerce platforms. Amongst the e-commerce platforms, Nykaa alone brings 51 per cent sales.

“Colour cosmetics makeup does well on Nykaa, but skincare has a larger market on Amazon. In skincare you're not actually browsing through shades to find the best suited. You're searching for a concern like acne treatment. So Nykaa isn't as great a search engine as Amazon,” he says.

Why does SUGAR sell on other e-commerce sites when it has its own website?

“As a new brand, we are trying to tell customers that we are a trustworthy brand with fabulous products at a great price. That is a tall ask. It will hurt conversions if I also say trust my own website and my own app only. We are not worried if they are shopping from us, or from any other app. We are only worried that they are choosing us over other brands,” he adds.

Since the onset of the pandemic last year, women have largely been locked up at home. Even when they stepped out, it would be with a mask on. How have these factors changed the way women use makeup?

For SUGAR, the demand for lips products contracted a little and the face category products like contours, foundation sticks, highlighters, bronzers and blushes expanded.

“SUGAR was not known for these products two to three years back. It was largely known for great quality lipsticks. But today our contour palette is the highest selling product, followed by the foundation stick. Face is a higher trust category. People typically experiment on their face only with those brands they have heard good things about,” he adds.

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