Investment-driven growth strategy sees Honasa banking on Derma Co and Dr Sheth's for a potential Rs 5,000 crore milestone by 2030.
In the bustling landscape of India's beauty and personal care market, Honasa Consumer is making waves with its two fastest-growing brands, The Derma Co and Dr Sheth's. These brands, catering to an evolved consumer base seeking nuanced offerings, are causing a stir and giving traditional market leaders a run for their money.
The Derma Co and Dr Sheth's have proven to be formidable contenders, with revenues of 500 crores and 150 crores respectively in FY25, growing at an impressive rate of over 30% annually.
The success of these brands can be attributed to their strategic approach. Rather than relying on glamorous celebrity endorsements, they have focused on getting a range of influencers to discuss regimens and products, challenging consumer problems and addressing specific needs. This approach, combined with a strong emphasis on ingredient transparency, has been a significant factor in driving consumer preference.
Ingredient transparency, such as clear labelling of hero ingredients, has been a key factor in the rise of certain brands. Santosh Sreedhar, partner at Avalon Consulting, notes that digital marketing allows D2C brands like The Derma Co and Dr Sheth's to target micro-segments at a lower cost compared to traditional mass-marketing.
The online BPC market in India is growing at 25%, giving D2C players like The Derma Co an edge over traditional rivals. This growth is reflected in the strategies of entrenched brands, with Hindustan Unilever increasing their influencer marketing spends by 40% and roping in 12,000 creators in FY25.
Honasa Consumer has also made strategic moves to expand its reach. It has acquired the Bblunt brand from Godrej Consumer Products Limited, which covers a market segment not covered by Mamaearth. The company is particularly bullish on The Derma Co and Dr Sheth's for their range of face washes and sunscreens.
Moreover, Honasa is focusing on quick commerce, which contributed 5% of its sales in the last fiscal, up from 2% in the previous fiscal. Tech and data have been crucial to the growth of The Derma Co and Dr Sheth's, allowing them to scale sharply to a relevant set of consumers.
Sanchari Chakrabarty, senior VP & head of strategy, 22feet Tribal Worldwide, agrees that brands that remain nimble, digitally savvy, and consumer-first will shape the future. As these D2C brands continue to challenge market leaders and carve out their own spaces, it's clear that they are here to stay.
The Derma Co offers science-backed skincare, while Dr Sheth's offers science and Ayurveda-backed formulations. Each brand addresses certain gaps in India's growing $21-billion beauty and personal care market. With their focus on innovation, consumer needs, and strategic partnerships, Honasa Consumer's The Derma Co and Dr Sheth's are poised to make a significant impact in the industry.
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