Mamaearth parent bets on Made-for-India goods in fastest-growing beauty mkt

By Satviki Sanjay

Honasa Consumer Ltd., the newly listed parent of India’s personal-care brand Mamaearth, is taking on global giants in the world’s fastest-growing beauty market with onion hair oil and curd-and-turmeric face masks.
 

India’s consumers increasingly want products made from local natural ingredients and crafted specifically for them, Varun Alagh, co-founder and the chief executive officer of Honasa Consumer, said in an interview. 

International competitors, on the other hand, mostly offer Indian consumers products from their international portfolios, he said.

Honasa’s products are made with India’s tropical weather and cultural nuances in mind, Alagh said. “That’s where we have an edge,” he said.

One-third of the beauty and wellbeing brands made available in India by Hindustan Unilever Ltd., or HUL, are from Unilever Plc’s global portfolio of products, based on data from their websites. But companies like HUL — now marketing its own new personal-care products such as Simple and Love, Beauty and Planet — are switching gears. Estee Lauder Companies Inc. in March rolled out limited-edition lipsticks called “the colour story of India.”

The strategy of adapting products to local tastes worked in next-door China — at least initially. 

Chinese beauty labels, such as lipstick and mascara brand Perfect Diary and hyaluronic acid cream maker Biohyalux, scored early market gains against global rivals. But Bloomage Biotechnology Corp Ltd. and Yatsen Holding Ltd. — respective parent companies of Biohyalux and Perfect Diary — have seen growth sharply curtailed since 2022 amid China’s sputtering economy, raising questions about the sustainability of the brands.

Honasa Consumer is a leader in a bounty of new personal-care niche brands challenging global giants in India, according to Redseer Management Consulting Pvt., which does not provide a market breakdown. Honasa’s success underscores the appeal of products aimed at Indian preferences as opposed to selling goods geared for western markets.

In March, the Gurgaon-based company launched cosmetics brand Staze, adding to its portfolio that also includes water-based skincare brand Aqualogica and Indian-skin specific Dr. Sheth’s. 

A fast-expanding middle class is expected to propel India’s beauty and personal-care industry at an average annual rate of 10  per cent between 2022 and 2027, the fastest in the world, according to Redseer.  

Honasa Consumer’s flagship brand Mamaearth, started in 2016, markets “toxin-free” products created with India-made ingredients, such as a bentonite clay face pack as well as onion hair oil.

The beauty firm’s revenue in the quarter ended Dec. 31 jumped 28 per cent to Rs 488 crore ($58.6 million). Profit grew 264 per cent in the same period to Rs 25.9 crore.

Honasa Consumer raised Rs 1,700 crore in a Mumbai November listing. Its shares have gained about 32 per cent since it started trading on Nov. 7, while India’s benchmark index Nifty 50 has risen 15.4 per cent in the same period.