Mamaearth Company Review

Mamaearth: Unique Unicorn Company, Read Strategic Insights

Mamaearth Company Review
Mamaearth Products

Mamaearth Company Overview

Mamaearth Company Review – The company was founded by the husband-and-wife duo Varun and Ghazal Alagh in 2016, headquartered in Gurugram, Haryana India. The startup company is a personal care brand that specializes in baby and toddler products. It develops products from world-class research and attempts to solve every little problem that the parents face. All products go through multiple testing processes including clinical dermatology testing before they reach the customers.

Mamaearth offers more than 80 toxin-free, natural products, including bamboo-based baby wipes, face masks, lotions, and hair care products. The products of the company cater to all personal care needs of young, increasingly health and beauty-conscious Indian consumers. The brand has been steadily growing as a household name in India. Practically every youth knows about this brand. Compared to its competitors such as Nykaa and VLCC, Mamaearth is focusing more on the premium market. Mamaearth is Asia’s first brand with Made safe certified products that offer 100% toxin-free & natural baby care, skincare, and hair care products. Over the past 5 years, the company has slowly gained market share through its innovative products.

Unicorn Startup Mamaearth Key Products & Services:

Mamaearth claims to manufacture the best quality baby products, Skin care products, hair, Beauty Products, and Body products. Further, the company claims to use the best science and Ayurveda methods to manufacture its products which are natural and safe. The company’s products can be categorized broadly into Personal care and Baby care products. Personal care products can further be categorized by hair care, body care, face care, etc.

Baby product: Although the company claims all its products are natural and based on Ayurveda, baby care products are flagship products that make the baby happy and hygienic.

Personal Care products: Mamaearth offers all kinds of personal care products that cater to the requirements of the people across all age groups. However, the cost of the products is higher than its competitors and hence is beyond the reach of the middle-class or lower-middle-class population. In spite of that, the company has been able to reach its target audience with its premium products, particularly the youth and working-age population.

Mamaearth Management team:

Ghazal Alagh and Varun Alagh are the founders of the company. Other promoters of the company are Ramanpreet Sohi (chief financial officer), Kunwarjeet Grover (senior vice president), and Abhishek Gupta (senior vice president).

Ghazal Alagh is a well-known face in India now after she appears in the “Shark Tank” reality show as a judge, produced and telecasted on Sony TV. She is one of the founders of Mamaearth. Ghazal Alagh holds a Bachelor of Computer Applications degree from Punjab University. She joined the School of Visual Arts for her Summer Intensive Course and attended the New York Academy of Art to finish an intensive course in figurative art.

Varun Alagh is the founder and chief executive officer of the company. He is also an officer of Honasa Consumer Pvt. Ltd., a company that owns the internet-first personal care brand Mamaearth. Varun is an engineer and has completed DCE & MBA from XLRI Jamshedpur. Before taking this assignment, he worked with Diageo Plc and managed World’s No1 spirits brand Smirnoff for India.

Mamaearth Company Review Financial snapshot

Mamaearth’s total revenue increased from INR 179 million in FY 2019 to INR 1098 million in FY 2020. The company revenue also takes a 4-time jump to reach INR 4610 million in the FY 2021. This reflects the demand for its products.

Parameters (INR Million -Year ended March 31)201920202021
Total income17910984610
Total expenses2141179.34356
Profit and Loss-35-59.2245.9

The total expenses increased from INR 214 billion in FY 2019 to INR 1179 million in FY 2020 and subsequently reached INR 4356 million in FY 2021. It has been incurring losses for the last two years i.e. 2019 and 2020. However, the company came into profit in FY 2021 with a profit of INR 245 million against a loss of INR 59 million in FY 2020. Mamaearth is likely to record strong growth in the next five years down the line. The key catalyst to look out for includes any easing of raw material price pressures and product innovation.

Industry Outlook:

The company has a large market opportunity aggregating $152 billion / INR10.6 trillion in the growing beauty, personal care, and fashion industry by the year 2025 in India. The Indian beauty and personal care market are also expected to grow to approximately $28 billion/INR 2 trillion by the year 2025 from ~$14 billion/ INR 1.1 trillion in the year 2020.

Mamaearth Growth Strategies:

The company has reached a target of building Mamaearth into an Rs. 500 crore brands by 2021. The investors are bullish about the company’s growth prospects and would want to increase their investment. In addition, the company is also continuously focusing on acquiring new consumers through different ways like coupon selling, discounted selling, etc. Mamaearth is also looking at launching more brands under the Honasa umbrella.

The company is focusing on the needs of the new-age, millennial consumers to launch new products. Mamaearth uses social media marketing as a strategy to reach its potential customers. With a ground reality check, it is confirmed that the brand has successfully reached its target customers. Currently, about 70 percent of Mamaearth’s business comes from online sales.

The company is also looking to expand its offline presence with the target of 40,000 outlets in 100 cities by 2022. Mamaearth is also expanding its business both organically and inorganically as a strategy. The parent company of Mamaearth, Honasa Consumer launched a new skincare brand Aqualogica in February 2022- a brand designed to redefine the hydration movement for modern millennial skincare based on ayurvedic recipes. Mamaeart is constantly speaking with its customers to understand their sentiments and create brands that serve them best.

Acquisition as a Strategy

The company also purchased “BBlunt” – the hair care and styling products business – from Godrej Consumer Products Limited (GCPL). Mamaearth’s parent company Honasa also has acquired a majority stake in pune based skincare brand Dr. Sheth at a cost of INR 28 crores. Dr. Sheth’s product portfolio has solutions for skin concerns like pigmentation, acne, dryness, wrinkles, and many others. The message is clear from Mamaearth that it is capturing market share before it comes up with the initial public offering next year.

Mamaearth Funding:

Mamaearth entered the club of the unicorn with a valuation of the brand above $1 billion in the year 2022. The company was last valued at $1.2 billion in January 2022 when it raised new funds from investors such as Sequoia and Sofina of Belgium.

Again, Mamaearth is planning to launch an initial public offering (IPO) in the year 2023. The company is planning to raise at least $300 million from the IPO with a valuation of around $3 billion.

Competitive Strengths: The company offers high-quality products, a strong brand name as a manufacturer of natural and safe products. The brand has strong customer satisfaction with great services, and wide product range.

Competitive Weakness: Most of its revenue comes from online sales (About 70%) and the company is focusing only on premium products.

However, there is a big scope for the market for product diversification. Since Indian consumers are increasingly becoming health conscious with a green lifestyle, the company can capture the market with innovative natural food products, men’s grooming products, etc.

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