Business news, strategy, finance and company insights
The Derma Co. has already become a ₹100 crore brand; Mamaearth had taken another 12 months to reach a similar size, says Alagh. The company’s game is going to be “much more aggressive towards building than buying”, says Alagh. Valued at just over $1 billion, Mamaearth managed to reverse losses of nearly ₹6 crore reported in FY20 to post profits of ₹24.6 crore in FY21 The brand is now subscribed to by some seven million customers; its D2C platforms serve more than 3,000 Indian cities, says Alagh.
With BBlunt now in its fold, Mamaearth’s plan is to grow the brand. Although Alagh did not elaborate, he did hint at the possibility of introducing a new product line. As far as trade shows go, the company might consider expanding its footprint. Currently, BBlunt lounge is only present in Mumbai and Bengaluru. The immediate opportunity is other subways, says Alagh. To be sure, the BBlunt product business will be handled entirely by Honasa Consumer; the salon business will however be a wholly owned subsidiary of the company, led by Spoorthy Shetty and the current team. The acquisition of BBlunt adds to Mamaearth’s broader strategy to reach upper middle class customers across the country.
“We’re an upper-middle class company looking at the premiumization trend that consumers are moving towards,” says Alagh.
While long-term fundamentals bode well for the industry, inflation could play spoilsport in the near term. Rising inflation and an uninterrupted rise in commodity prices may necessitate price hikes. Alagh says raw material prices have soared by up to 200% in the case of some items. The company, however, manufactures all its products in India, it imports a certain proportion of raw materials and packaging materials. “We may have to raise prices. The impact (of rising prices) of palm oil, of crude oil, is perceived in different ways. The cost of logistics is increasing,” says Alagh.