Beauty & personal care brands bet big on offline expansion

Sugar Cosmetics, the $500 million beauty startup, isn’t a brand one typically expects to see in small shops in bustling middle-class neighbourhoods. Indeed, the millennial-focused beauty brand is more typically associated with online sales or traditional beauty retailers. A closer look at the crowded shelves of kirana stores, however, may surprise you.

In multiple hole-in-the-wall shops in the narrow bylanes of Delhi’s Amar Colony market, Sugar products share shelf space with their more ubiquitous peers from large FMCG players. This range of products—Pop by Sugar—is a marked deviation from Sugar’s more premium products. “See this Pop lipstick, it is for Rs 250. Otherwise Sugar lipsticks sell above Rs 800,” one shopkeeper told a teenage customer.

Already a thriving business with 120 of its own stores, apart from a popular online store, and a presence in thousands of modern trade stores across the country, Pop represents Sugar’s desire to reach India’s masses. “Pop is more of a general trade experience for unassisted selling. You can see the range is very accessible—lipsticks, kajal, lip balm, etc. It is for a younger audience… and serves as an entry-point for a customer into Sugar,” company co-founder and CEO Vineeta Singh told The CapTable.

All told, Sugar is now present in 40,000 modern and general trade stores. Today, offline sales account for almost 60% of the company’s annual revenue run rate of Rs 550 crore, with half of this coming from its own stores. In the next few years, Sugar expects offline sales to account for around 65-70% of its revenue.