SUGAR CASE STUDY

About Sugar:

SUGAR Cosmetics is a beloved beauty brand amongst the millennial generation, particularly for its stance on animal testing.

It has skyrocketed in popularity in India and is renowned for its unique packaging and top-of-the-line makeup range. It caters to the fearless and independent female demographic who refuse to be put into a box.

Although Sugar Cosmetics is a relatively new business, they are already having a big impact on the cosmetics sector. They are well-known for their reasonably priced, cruelty-free, and vegan cosmetics.

Product Marketing countries:

In addition to India, Sugar has a presence in international markets such as Korea, Germany, Italy, and the United States.

Founder:

The company was established in 2015 by Vineeta Singh as its CEO and Kaushik Mukherjee acting as COO. It is based in Mumbai, Maharashtra, India.

Business model:

It's a D2C, B2C company brand.

D2C- Is an acronym for direct-to-consumer. A company manufactures a product in its own facilities and distributes it through its own channels.

Growth:

It is a relatively new company but has already had a great effect on the cosmetics industry. They are known for their reasonably priced, cruelty-free, and vegan makeup.

• Sugar Cosmetics began as a digital-focused brand, emphasizing performance marketing, influencer collaborations, and content-driven marketing.

  
  

• It has since invested in different forms of marketing, such as outdoor advertising, print, and radio campaigns, partnerships with similar entities, and participation in events. A key factor in their success was not just targeting women, but rather all genders.

  
  

• As an Indian brand, they cater specifically to their Indian customers. From 2,500+ retail locations in 2020, Sugar Cosmetics has grown to 35,000+ in over 130 cities.

  
  

• They are committed to improving their omnichannel strategy.

  
  

• Sugar Cosmetics defied the market expectation by experiencing a 22% growth in operating revenue during the last fiscal year.

  
  

• According to its financial documents, the company earned Rs 126.4 crore in FY21, as compared to Rs 103.71 crore in FY20. The majority of their revenue, 93.1%, was generated within India, with domestic sales rising from Rs 87.7 crore to Rs 117.61 crore in FY21.

  
  

• However, export sales were significantly impacted by travel restrictions and other freight interruptions, falling from Rs 16 crore to Rs 8.7 crore.

  
  

Investments:

Ranveer Singh and A91 Partners are among the most recent backers of the company.

• L Catterton's Asia investment fund led a $50-million Series D funding round last month. Other private equity firms and investors, including A91 Partners, Elevation Capital, and India Quotient were also involved in the round.

• SUGAR Cosmetics has raised $85M in funding over five rounds, with nine investors involved.

Marketing Strategies:

1. Mid-range items:

• Lakme and Maybelline products are within the 300 price range. If you want to buy goods that cost 1,000 or more, you may go to MAC or Estee. However, the gap between 300 and 1000 remained unbroken; there were no goods in this range.

• Sugar Cosmetics chose to fill this gap by launching their goods in quantities ranging from 300 to 1000. These items were reasonably priced and instantly drew buyers' attention.

2. Influencer marketing:

• Sugar Cosmetics didn't just use influencers for marketing; they also made their consumers become influencers. If you like the product, you won't mind showing it off!

• So, in this example, Sugar Cosmetics persuaded its clients to publish their product reviews on social media. Furthermore, they have always benefited from free promotions.

• In layman's words, this is known as word-of-mouth marketing. Because a satisfied client is a valuable resource, they significantly aided the business in expanding its consumer base.

3. Hybrid Mode:

• Sugar Cosmetics was a digital-only brand until 2017. They used to offer items through websites and other big eCommerce partners.

• By early 2018, they had expanded into general trade and large-format merchants in shopping malls and had gradually begun to build exclusive boutiques.

• They now sell their goods on numerous eCommerce sites such as Sugar Cosmetics, Amazon, Nykaa, Shein, and others. In terms of retail, they have 35,000 retail stores in over 130 cities.

• They are making every effort to develop their omnichannel approach.

Future:

• The brand has set its sights on a major offline expansion, with the intention of opening exclusive brand outlets and increasing its retail network in various cities across the country. The brand is targeting Tier 2 and 3 cities for the next stage of its growth, hoping to generate net revenue of 500 crores ($63 million) this year as a result of its retail expansion.

  
  

• The goal of this expansion is to reach out to the younger generations in the smallest cities of the country, in order to expand their market share and drive their growth.