The founder speaks on big trends this year, plans for the future, and the impact of Tira entering the category.
Quick commerce players, originally catering to grocery emergencies, have expanded their operations to include a wide array of products. Now, from Christmas decorations to the latest iPhone, everything is conveniently accessible with just a single click.
This year, quick commerce platforms like Zomato’s Blinkit, Zepto, and Swiggy’s Instamart are gunning up the beauty and cosmetic industry by offering the swift delivery of beauty products within 10 minutes. These platforms serve as a pivotal point of sale for online beauty brands, allowing customers to explore and purchase new offerings.
Shankar Prasad, founder, Plum Goodness tells afaqs!, “The quick commerce industry is growing faster than average. They started with a small base. But in future, there will be a lot of stabilisation as they’re looking to refine their models using metrics and touchpoints. Quick commerce has picked up well in the last 12-18 months.”
He pointed out that one of the nuances these quick commerce platforms witness is that they are not offering virtual testing, a feature beauty brands are currently looking to implement at scale. This testing can offer flexibility to both the brand and customers. Due to the model, quick commerce can’t offer these solutions.
Prasad predicts, “Quick commerce can grow 60-80% YoY in our category, driven by both geography expansion and penetration of beauty products into the basket of consumers on these platforms.”
The synergy between offline and online space is strong, as a lot of discovery happens online. The line between the online and offline world is blurred due to omnichannel presence.
Trends in 2023
According to Prasad, the major trends in the beauty industry from a consumer standpoint are:
People continuously seek efficacy on products, not stated efficacy but proven efficacy. Therefore, the category has become efficacy-driven.
Experimentation continues but has not grown in terms of magnitude as compared to 2021 and 2022. The customers are settling down for tried and tested products.
Premiumisation continues this year as a trend, and people are willing to pay more for that.
From the industry end, the trends are:
Inflation is under control, therefore brands can spend more on promotions and advertising.
Competition is still high in the category, but it will settle down in the coming years.
Funding winter is looking to decline, as compared to the beginning of the year.
The vegan beauty brand is currently operating 30 exclusive outlets, and its products are available in around 15,000 outlets comprising both assisted and unassisted stores.
“The synergy between offline and online space is strong, as a lot of discovery happens online. The line between the online and offline world is blurred due to omnichannel presence. The discovery part is happening online, while retail reinforces it with the physical experience,” Prasad highlights.
He also adds that the customers take the brand seriously if it is present physically. It helps to bring a name and face to the whole brand which helps in familiarity.
Also, the brand is gathering real-time feedback from physical stores. In the next 6-8 months, the brand is looking to open 20 new exclusive outlets.
Currently, the company’s revenue split is 60% through online mode and 40% via offline mode. Out of 60%, 35% is driven by marketplaces, and the rest is from their website.
The top eight cities in the country look to generate just 35% revenue of the brand. The brand’s major revenue is gathered from other cities of the country.
“As awareness is equal due to penetration of the internet and brands have a super highway to reach digitally to customers. The attraction in both brand outlets and online is strong beyond metro cities,” Prasad states.
In FY’22, the brand generated a revenue of Rs 250 crore, and in FY’23 it is looking to reach a milestone of Rs 500 crore.
Reliance entering into the category
In April, Reliance Industries subsidiary launched the Tira beauty platform, which has its app, website and a 4,300 sq. ft store in Mumbai. This move caused worry lines to appear in India’s beauty and personal care (BPC) market.
As Tira enters the category, will the D2C business get hampered?
Prasad answers, “There is a secular double-digit growth in the category, and it will double in the next five to seven years. The market is huge, and it's a good place to be as an industry. This clearly states there is a lot of scope for brands and retailers to play.”
As the industry is growing, there’s stratification happening. In future, a particular retailer will be good for a specific sub-category. A customer would relate to a brand for a specific category
He mentions, “As the industry is growing, there’s stratification happening. In future, a particular retailer will be good for a specific sub-category. A customer would relate to a brand for a specific category.”
This year, the brand has not launched a national-level campaign despite having Rashmika Mandanna as an investor. The brand is currently focusing on product-specific campaigns with influencers.
“Our marketing activities are concentrated on specific products on a specific channel. It’s working well for us as a brand, and we’re looking to go with short-term campaigns”, He mentions.
He predicts that the CTV (connected TV) can be a game-changer medium in the future.
“Sports as a medium can become big as it is still unexplored outside cricket in India,” Shankar predicts.
In 2024, the brand will be focussing on its men’s brand Phy, with specific marketing strategies.