During its launch in 2015, Sugar Cosmetics had only produced two products: a black matte eyeliner and a black kohl pencil. Since then, the business has expanded to 450 Warehouses.
With a huge fan base among millennials, Sugar Cosmetics is one of India’s fastest-growing luxury cosmetic firms. It has been the first choice of many Indian women because of its clutter-breaking mentality, distinctive low-poly packaging, and top-selling products. From cutting-edge facilities in Germany, Italy, India, the United States, and Korea, the company ships its best-selling products worldwide in the Lips, Eyes, Face, Nails & Skin categories.
With a cruelty-free line that is high on design and high on performance, the brand is committed to creating products that are a wonderful fit for every Indian skin tone throughout the seasons and throughout the calendar. By 2022, Sugar Cosmetics expects to have 30,000+ retail locations spread over 130+ cities, aggressively growing its already robust presence. It is supported by the conviction of renowned investors and the fervor of millions of fans of beauty.
Founders
Before the two of them founded this company, Vineeta’s husband and business partner Kaushik was employed with McKinsey & Company, while she was striving to advance her career at a different company. They both had a great deal of regard for one another’s skills, but the notion of working together had never occurred to either of them. Soon, they both discovered that they had different interests, such as Kaushik’s love of technology and her passion for product development and marketing.
So they decided to work together, with Kaushik working on an eCommerce project and she starting a women’s company.
Business model
Sugar Cosmetics operates under a direct-to-consumer form of business and sells its products through a variety of eCommerce sites, including Amazon, Nykaa, and others. Sales of its goods in India and other exports are among Sugar Cosmetics’ main sources of income.
Funding
Throughout four investment rounds, Sugar Cosmetics has received $85.5 million. On October 21, 2020, Sugar received $21 million in a Series C round of funding. Subsequently, the company closed a $50 million Series D funding round with participation from the Asia Fund of L Catterton and several other existing investors, including Elevation Capital, India Quotient, and A91 Partners.
L Catterton, which recently provided funding for Sugar, has sold a portion of its Asian portfolio interests to Hamilton Lane, a US-based alternative investment management company, for $360 million as of June 27, 2022. Only its Fund 1 and Fund 2 have reportedly seen the company withdraw private equity investments in startups. It did not, however, divest any of its Fund 3 holdings, via which it made investments in businesses including Reliance Jio and Sugar Cosmetics.
Ranveer Singh has recently joined Sugar Cosmetics as an investor. After that, in May 2022, the business obtained Series D capital. The actor has made his first business investment, though the sum is still unknown. With this new alliance, the business hopes to develop new paths for customer acquisition and establish itself as a preferred cosmetics brand for millennial and Generation Z consumers.
Expansion during pandemic
Singh claimed that when the lockdown started in March, they were actually in the process of drafting grand plans for FY21. They reached the 100 crores net revenue mark in FY20. They found it more psychologically taxing to be unable to fall below Rs. 100 crore. However, because April and May were so challenging, there was a period when they were doubtful. As a business, they’ve always been on the verge of breaking even and have paid close attention to our profits, but the first quarter of FY21 brought a loss of $5 crore, and they realized they had to turn things around.
The impact was worse because retail outlets accounted for 60% of their revenue. As a result, the team coalesced behind the goal of generating at least 5 crores in net income in June during unlock 1.0. The entire retail team devised a strategy for being accessible for e-commerce sales. Then, in June, their net revenue was 6 crore.
Revenue
The Sugar Cosmetics operating revenue grew by 22% during the same fiscal year, rising from Rs 103.71 crore to Rs 126.36 crore. The company’s overall revenues were dominated by domestic sales, which accounted for 93.1% of its sales and increased by 34.1% from Rs 87.7 crore to Rs 117.61 crore in FY21. However, Sugar’s export sales fell by 45.4% as a result of the pandemic-related travel and freight interruptions that the company experienced.
Future plans
With a physical location in Russia and an online presence in the US, SUGAR Cosmetics has grown outside of India. SUGAR Cosmetics plans to expand its offline standalone shops in FY22. The brand, which was founded in 2015, currently independently runs more than 70 outlets, with plans to reach 100 by the end of 2022.
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