E-commerce

Going offline isn’t easy. Honasa and D2C brands are finding that out the hard way

Pranav Balakrishnan

November 22, 2024 | 6 Min Read

Going offline isn’t easy. Honasa and D2C brands are finding that out the hard way

Free Read

November 22, 2024 | 6 Min Read

In its rush to expand offline, Honasa Consumer relied on superstockists instead of building its own distribution network. With no visibility beyond the stockist level and mounting returns of expired products, this shortcut appears to have blown up in its face.

It has been a week since Honasa Consumer announced its quarterly results, but the company continues to dominate the news cycle as its stock has been in freefall ever since.

The share price of the beauty and personal care (BPC) company, best known for its skincare brand Mamaearth, closed at Rs 370 on November 14—the day before its results. Yesterday, the stock fell another 10% to close at Rs 237, valuing the company at less than $1 billion, losing the coveted unicorn status that the company achieved in its last round of private funding.

The stock markets punished Honasa for what has transpired in its business overall, particularly its offline business. The company reported a loss of Rs 18.71 crore in the July-September 2024 quarter from a profit of Rs 29.78 crore in the corresponding quarter in the previous year. During the same period, its operating revenue fell by 7% to Rs 461.82 crore. The loss is primarily due to provisions the company is making for liquidating its offline inventory.

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Going offline isn’t easy. Honasa and D2C brands are finding that out the hard way

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