Beauty and personal care startups, including Sugar Cosmetics, mCaffeine, Wow Skin Sciences, and online retailer Purplle, have successfully reduced their losses in FY24 by tightening their advertising and promotional expenses. However, high overall expenditures continue to weigh on profitability as these brands push to expand their offline presence and bolster visibility.
Wow Skin Science, backed by Singapore’s sovereign wealth fund GIC, narrowed its losses by 39% to Rs 130 crore in FY24 despite a 9.5% revenue dip to Rs 233.5 crore. Marketing costs, which constituted nearly 30% of its expenses, fell sharply by nearly half to Rs 107.8 crore, aiding its cost cutting efforts.
Online retailer Purplle, a direct competitor to Nykaa, also made strides in its financial performance. By reducing marketing and promotional expenses by 20%, the company nearly halved its losses to Rs 124 crore, supported by a 43% revenue surge to Rs 680 crore.
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For mCaffeine, known for its caffeine-infused skincare and haircare products, losses shrank by 7% to Rs 85.4 crore, attributed to a 12% cut in marketing costs. This improvement came despite a 6% decline in revenue to Rs 193 crore, reflecting the challenges of balancing cost efficiency with growth.
Sugar Cosmetics, a prominent player in the direct-to-consumer beauty market, reduced its losses by 11% to Rs 67.5 crore in FY24, driven by a modest 20% growth in revenue to Rs 505 crore. Notably, Sugar maintained its advertising and promotional expenses at the previous year’s level, benefiting from revenue growth that outpaced spending.
However, not all startups in the sector saw improvement. Brands like Renee Cosmetics, Pilgrim, and Foxtale faced deeper losses as they grappled with finding the optimal channel mix and continued hefty investments in brand-building to capture consumer attention in a highly competitive market.
Despite ongoing struggles, the beauty and personal care segment offers significant growth potential. India’s $20-billion beauty market is projected to grow at an annual compounded rate of 10–11% over the next four years,
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