Beauty & Personal Care (BPC) is the fastest-growing e-commerce segment in India, according to Inc42’s State of the Indian E-Commerce Report [H1 2024].

 

🔷 INR 2,32,000 Cr+ market opportunity by 2030

🔷 INR 9,000 Cr+ raised by BPC startups from 2014 to Q1 2024

🔷 INR 620 Cr+ market opportunity for AI-powered BPC by 2030

🔷 INR 78 Cr+ median ticket size for BPC funding rounds in Q1 2024

 

Clearly, the BPC space is brimming with potential; ergo, it’s no surprise that over 68 startups have entered the fray since 2014, competing for a slice of this massive market.

 

Scope of companies in the BPC market in India

 

In this edition of The D2CX Newsletter, let’s understand what separates the winners from the rest in the BPC industry.

 

Brand + Product + Pricing ➡️ D2C Success

When we put successful D2C brands in the BPC industry under the microscopic lens, we noticed all of them have one thing in common – they’ve aced Brand Narrative, Product Experience, and Pricing Strategy!

 

And this makes sense, right?

 

It’s imperative for these 3 factors to work in harmony for long-term success. Here’s how 👇

 

✔️ Brand Narrative drives initial discovery and helps consumers to connect with the brand

✔️ Product Experience delivers on the promises made in the brand narrative and ensures consumers keep coming back

✔️ Pricing Strategy strikes the balance between affordability and exclusivity, and strengthens market positioning

 

Brand Story = Brand Identity

Brand narrative isn’t just a backstory—it’s the key that resonates with potential consumer cohorts and makes them choose a product over the 20 other options on Nykaa, Amazon, or any other marketplace.

 

Why & How?

Nykaa’s Beauty Summit Report 2024 reveals consumer preference is increasingly being influenced by authentic brand stories, ingredient transparency, and a mission. 

 

The democratisation of the internet in India has made social media a major marketing platform for BPC brands. 520 Mn social media users in India​ alone, that’s correct!

 

And, how are successful D2C brands leveraging the social media gold mine?

Well, they are generating trust and loyalty by establishing relatability with consumer cohorts, telling them compelling stories.

 

Also, another report reveals 88% of consumers, especially millennials and Gen Z, say authenticity is the key factor when deciding which brands to buy from. This is where brand narrative becomes key!

Take Mamaearth’s focus on natural ingredients and environmental sustainability for example. This brand narrative resonated with young, eco-conscious consumers, playing an instrumental role in skyrocketing their brand to INR 1,000 Cr+ revenue in FY23.

 

BOC market - mamaearth example

 

A Skin-Deep Product Experience!

Consumers prioritise quality over price when it comes to beauty products. This means a product has to do more than make for a viral Instagram story!

 

How Are Leading Brands Cracking The Product Experience Code?

 

✔️ Innovative Product Formulation
SUGAR Cosmetics innovates with its long-lasting, high-pigment formulas for Indian skin tones, making it a cult favourite and driving 40% sales from repeat customers.

✔️ Packaging As An Experience
Brands like Juicy Chemistry are known for their eco-friendly, biodegradable packaging, further reinforcing their sustainable ethos.

✔️ Innovative Formulas
The Sleep Company, though a mattress brand, amplifies its core offering with a sleep-inducing aromatherapy range as part of its BPC extension.

 

BOC market - Juicy Chemistry SKUs

 

Pricing: Hitting The Sweet Spot Between Premiumisation and Value

In a price-sensitive market like India, getting your pricing right is crucial. However, pricing shouldn’t just be about being cheap—it’s about delivering value at the right price point.

 

The challenge? Balancing affordability without sacrificing quality.

 

🔷 Premium pricing strategies can work if backed by superior product quality and transparent brand communication​.

Consumers, particularly in Tier 1 and 2 cities, spend on products that align with their values (e.g., cruelty-free, organic, etc.)

🔷 Brands like L’Oréal and Estée Lauder have mastered the art of positioning premium products while justifying the higher price tag with superior results.

 

Brands like mCaffeine offer mid-range products and boost sales by running limited-time offers and encouraging cross-selling through value-driven bundles​.

 

Finally, it boils down to whether or not the brand is creating value for the consumer and justify the pricing of its products. If yes, the brand wins!

 

That’s the gist.

 

Until the next one!