In the Indian market customers don’t look for cheap but value for money products, as per Kaushik Mukherjee, Co-Founder and COO, SUGAR Cosmetics. Celebrating its seventh anniversary, the brand has hands-on experience of the challenges of setting up a D2C brand in India, including standing up against globally renowned names like Hindustan Unilever, Procter and Gamble and Loreal for a market share and then finally expanding as an omnichannel brand.
While the journey wasn’t easy, the ride was certainly worthwhile, as per Mukherjee.
Mukherjee said, “India is not a market where customers necessarily look for the cheapest products, but rather look for value products. Hence, instead of trying to compete on prices, which is very tough, we decided to build value for money products and that's what we have kept harping on.”
“When we launched SUGAR Cosmetics in 2017, we were a very small scale brand and the entire company turnover was Rs 18 crore in FY18. But today we have grown manifold to sell approximately 50 crore of products in a month,” said Mukherjee.
As per Mukherjee the success of the brand is primarily attributable to SUGAR’s audience. “They have continued to choose us time and again, especially in the times when consumers are constantly switching between brands owing to premium prices and the novelty factor,” he added.
When asked about how the founders came up with the name ‘SUGAR’ in the first place, Mukherjee said, “We had shortlisted a few names for the brand- Stoked, Fabulicious, Pepper Cosmetics and SUGAR Cosmetics, and ran a poll with the names. One of the things that stood out for Sugar was that everybody somehow felt that they had heard the name somewhere and it just didn't seem like a new brand to them. It resonated very strongly with our young audience and since we were partially data-backed, we decided to name it SUGAR Cosmetics.”
He also went on to add that the biggest thing one wants to see when they’re establishing their own brand is that people should find it familiar and not look for what it is about and where it comes from. “As a brand, one must provide solutions that the audience can trust,” he suggested.
Commenting on the USP of the youth and female-oriented brand, Mukherjee stated that SUGAR Cosmetics has seen an evolution in its USP from being Bold, Free and Unstoppable to producing premium quality products which are transfer proof for a longer duration, especially for the younger generation.
Upon being asked about what has kept the audience glued to SUGAR, Mukherjee also said that the novelty factor wears off with time, unless the brand continues to stay consistent and delivers on its promise.
Mukherjee also talked about how SUGAR became the first brand to enter and cross 1,00,000 homes and went viral because of their liquid lipsticks which were transfer-proof and long-lasting.
As per Mukherjee, when SUGAR started it began with nails and lips categories, but with time, the brand has evolved and matured even in the face makeup line. Makeup has four categories- eyes, lips, face and nails and cracking the face meant a lot to them because it is the toughest to crack since it belongs to the highest trust categories.
Since today, the face category forms the largest category of SUGAR, in terms of both volume and value, Mukherjee emphasised that the brand has found its place in an extremely cluttered market.
Furthermore, he added, “The most important element in our marketing mix is the digital mediums as awareness and engagement are placed at the top of the funnel for SUGAR Cosmetics.”
As of now SUGAR has 2.2 million followers on Instagram and nearly 6 lakh subscribers on YouTube. “We like paid, earned and self-owned media, but the most crucial for us is the earned and owned media as what lasts is what you build on your own channels- YouTube and Instagram.”
Speaking about the journey ahead, Mukherjee said, “We have not seen any of the two, be it accounts stalling or the growth rate tapering off, which implies that there's still a lot of market left to cover. The brand growth has been robust but we still have a lot of growth ahead of us.”
When SUGAR started, the brand clearly mentioned that it wants to cater to every Indian skin tone and Mukherjee said that its product range backs this claim. “What happens with global cosmetic brands is that they only bring a subset of their global range to markets like India and don’t engineer products specifically for India,” he said.
In the past seven years, the target audience of the brand has also evolved and grown with it. “When we started we catered to the younger audiences in the age group of 21-29 years since it was the youngsters who discovered us online first and then started to order online, be it on our website or through Amazon, Nykaa, Myntra, etc. Moreover, for our retail distribution and the 3,500 stores across India, the target audience ranges from the age group of 18 years to 36 years.”
Mukherjee also pointed out that SUGAR doesn’t go for discounts a lot since discounts pegs them in the same price point as a mass market brand which has a relatively larger distribution and a celebrity face as well.
“One thing that sets us apart from all our competitors is that whenever any of our customers request for a refund, we just ask them for a proof of purchase and send another new product and request the consumer to pass on the previously used product to their friends and family, completely free of cost,” Mukherjee claimed.
Commenting on how SUGAR, which was initially launched as a D2C brand, became an omnichannel brand, Mukherjee said, “Our consumer acquisition costs have been going down, but in the last two years, we have also diverted some of the funds towards online marketing spends, towards our ATL campaign. Moreover, our ad spends have also increased in the past years as our focus has shifted from only digital campaigns to launching our own TVCs in several regional languages.”
Mukherjee also emphasised that SUGAR Cosmetics has two product buckets- Cash couch bucket and innovative product bucket. While it is the responsibility of the cash couch bucket to ensure that a steady cash keeps coming in as revenue for the brand, the innovative products bucket deals with products which are opinion shapers. “10% of our products are only built to trigger conversations, build the brand’s positioning and to put it out there that SUGAR is a technology-driven brand,” he said.
On a concluding note, Mukherjee also pointed out that Sugar has not yet hit the stage where it has to start cutting down on advertising but it will rather adopt a much more aggressive strategy for their ATL spends on brand building.