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When it comes to the cosmetic industry, consumers are always concerned about the process that is followed while manufacturing the products. This is why the world is seeing a new era of cosmetic products that are organic, produced in a natural way, and with the help of natural products that are free of toxins and other chemicals.
The craze for these organic products is palpable simply because they mean no harm to our skin, hair, gut, and ourselves in general. Leveraging this drive for organic products, Mamaearth has catapulted itself into a promising startup in the cosmetics industry that comes with the American Made safe Certification, the first nontoxic seal for the products in use today.
Mamaearth was founded in September 2016 by Ghazal Alagh and Varun Alagh, to make skincare routines a little chic but with utmost care. Headquartered in Gurugram (India), Mamaearth is distinguished in the cosmetics industry of India as an online platform that offers natural and toxin-free skin care products.
Here's diving into the Success Story of Mamaearth where we will also discover about the Founders and Team of the company, its Startup Story, Target Market Size, Product/Services, Mission and Vision, Name and Logo, Business and Revenue Model, Funding and Investors, Acquisitions, Growth, Partnerships, Challenges, Competitors, Awards and more.
Mamaearth - Company Highlights
- Startup Name-Mamaearth
- Headquarters-Gurugram, India
- Sector-Personal Products
- Founders-Ghazal Alagh and Varun Alagh
- Founded-2016
- Parent Organization-Honasa Consumer Pvt. Ltd.
- Total funding -$126 M (Till January 2023)
- Valuation-$2 bn (December 2022)
- Revenue-$117.8 million (Rs 943 crore in FY22)
- Website-www.mamaearth.in
Mamaearth - About and How it Works
Through an innovative product line, Mamaearth has tried to solve a common Indian parenting problem. In a country where most of the baby products available do not meet safety regulations, Mamaearth offers products that are safe by international standards and loaded with the goodness of nature.
Mamaearth is often hailed as the 1st Asian brand with a “MADE SAFE” certification. The products that the company brings to the masses are free of all known toxins that are banned in most countries. More than being just a commercial brand, Mamaearth takes pride in making products out of love and care. In case you are wondering about the country/origin of Mamaearth, then the company is based out of India with its headquarters in Gurugram (Gurgaon), India.
Mamaearth - Founders/Owners and Team
Mamaearth Co-founders, Ghazal Alagh and Varun Alagh incorporated Honasa Consumer Private Limited in 2016 and then went on to launch the Mamaearth range of toxin-free products in December of that year. The couple had made it their mission to make safe, chemical-free products available to all babies in India. The company has now grown to be an organic product manufacturer for babies, moms, dads, grandparents, and everyone else.
Varun Alagh
Mamaearth Co-Founder, Get Stuff Done Officer, and the Chief Dad of Mamaearth, Varun Alagh is from the FMCG industry. Varun Alagh has a BE in Electrical Engineering from Delhi College of Engineering, followed by an MBA in Finance and Marketing from XLRI Jamshedpur. Varun has previously worked in Hindustan Unilever, Smirnoff, and The Coca-Cola Company where he managed key leadership roles before founding Honasa Consumer Pvt. Ltd., the parent company of Mamaearth. He is known for the brand management expertise he brings to the table.
Ghazal Alagh
Ghazal Alagh is another Co-founder of Mamaearth, who is also known as the Chief Innovation Officer. Ghazal has completed her BCA in Information Technology student from Panjab University. She then served as a Corporate Trainer at NIIT and later on founded Dietexpert in February 2012 before founding Mamaearth under Honasa in 2016. Ghazal has also completed Intensive courses in Modern Art and Applied Arts from the School of Visual Arts and New York Academy of Art and is recognized as one of the top 10 women artists in India and both nationally and internationally.
“We are a 'mum-powered' company and work with a large number of mothers who are involved in the process, right from ideation, conceptualization to the actual product launch. We believe this connection with mothers will continue to be the biggest driver of success. We have more than 200 young moms on board who help us in conceptualizing and formulating the products. The moms then test these products, and only those with great feedback are approved for mass production,” says Ghazal Alagh.
The workplace culture is open, ambitious, experiment-oriented, and not rigid in terms of hierarchy. All of these make Mamaearth a fun place to work at.
Mamaearth Ownership
Varun Alagh holds the majority stake in Mamaearth, which is 38.72%. The next in the line of Sequoia Capital, which holds 15.22% of the stakes. Then comes Fireside Ventures, which holds 12.04% of stakes whereas Stellaris Ventures holds 10.42% of stakes. 8.72% of shares are with Sofina Ventures, Co-founder Ghazal Alagh controls 3.58% of stakes and 1.32% of stakes are with Shilpa Shetty Kundra. The rest of the stakes, which comes down to around 10.44% are with Others, as of March 2021 data.
Mamaearth - Startup Story | How was Mamaearth Started?
In the US, there is a strong awareness of the harmful chemicals found in the most commonly used personal care and baby care products. During Ghazal’s stay there, she became more conscious of the kind of products she was using and started checking the ingredients list before buying any baby care item.
When Varun and Ghazal were expecting their first child (the couple was in India at the time), they realized that the baby care products they came across contained harmful toxins and safer alternatives weren't available. Since the husband-wife duo couldn’t find any safe products for babies in India, they stopped using Indian products and imported reliable products manufactured in other countries.
They eventually started ordering products from the US but that turned out to be a costly and inconvenient arrangement. Besides, they also realized that it wasn’t just them, in fact, there are one too many parents in India who struggled with the same concern.
However, finding no solutions at hand, Varun and Ghazal Alagh researched the ways they can turn baby products safer and more affordable They spent sleepless nights over the founding of a new brand, created a dedicated R&D team for it, and applied for appropriate certifications.
All of these ultimately gave rise to Mamaearth, and it soon became Asia's 1st brand to offer "MADE SAFE" certified products that were toxin-free and loaded with the natural goodness that babies deserve.
“We are on a mission to reduce parental stress & are continually improving and innovating to make the world a safer place for both babies and their parents,” adds Ghazal Alagh.
Mamaearth was initially started with an investment of around Rs 90 lakh, which Varun and Ghazal invested out of their own pockets. This was later followed up by the Seed investment in 2016.
Mamaearth - Target Market Size
According to estimates by the market research company Technavio, the baby care market in India is expected to grow at a 12% CAGR in revenue in the next three years. In terms of the products available, Mamaearth has segmented its products as follows:
- Baby
- Beauty
- Hair
- Face
- Body
- Gift packs.
Mamaearth - Product/Services
Mamaearth is focused on babies and others with an exclusive product range that caters to baby care, haircare, skincare, and more with over 140 natural products under its umbrella. Some of the most innovative products developed by Mamaearth include India’s first bamboo-based baby wipes, easy tummy roll-on with Hing and Fennel for colic and digestion relief, and 100% natural plant-based toothpaste for children between 0-10 years. It also has a range of skin and hair care products around popular natural ingredients such as onion, Ubtan, tea tree, vitamin C, argan, coco, and charcoal.
It has expanded not only to cater to babies but their mothers as well with varied products ranging from sunscreen to stretch mark removal serum. It focuses on all aspects of motherhood. A fan favorite is their onion range of products for mothers.
Mamaearth - Startup Launch
The Mamaearth team believes in mum-power and decided to directly target mothers. The founders were confident that once the customers used Mamaearth products, the word-of-mouth publicity would work wonders for the company. The team also leveraged the power of social media through influencer marketing.
The primary strategy was to resonate with like-minded parents who wanted nothing but the best for their babies. The customer acquisition strategy is purely focused on digital content.
“We want consumers to read about the problems that our products solve and why our products are the best in the market. We work with over 500 mom bloggers. We are also innovating constantly to stay relevant and cater to the dynamic market needs,” said Ghazal Alagh.
The most significant project, which helped Mamaearth achieve the current growth rate was the lean innovation cycle; it was geared to launch, learn, and scale quickly. Lean innovation helped them focus on customer-specific needs identification. Apart from this, rapid experimentation allowed the validation and improvement of many product concepts on a real-time basis. It aided in increased customer satisfaction and reduced the time-to-market.
Mamaearth - Mission and Vision
We aim to build a brand which is your friend, every parent’s friend. A friend who understands you, knows your issues and tries hard to resolve them, well most of them. A brand which every parent like you and me can trust, which intends to make lives of mums & expectant mums better and beautiful. A brand which welcomes all our babies to a healthy and a safe world. We aspire to take care of every parents & baby’s wellbeing from head to toe with safe, toxin free, international standard products which you can choose without having to think twice. Well it’s a lot like love, Awwww, as mentioned on the "Our Mission" section of the Mamaearth website.
The brand aims to solve the recurring problems of young parents with safe, toxin-free, and international standard products, which will help them cherish the joy of parenting without any hassles.
Mamaearth - Name and Logo
Mamaearth is an online retailer that specializes in organic products that are best for babies, their mothers, grandparents, and others.
Mamaearth - Business and Revenue Model
Mamaearth formulates products that are then produced by contract manufacturers under a license from the Mamaearth brand. Mamaearth is a trademark owned by Honasa Consumer Pvt. Ltd.
Mamaearth is a digital-first FMCG company whose revenue model is based on the offers that are posted on the D2C platforms (Amazon, Flipkart, etc.) and their eventual sales along with the sale of products displayed at traditional offline stores. The team at Mamaearth follows the blue system with an omnichannel presence, according to which innovative products steer growth.
Mamaearth - Funding and Investors
Mamaearth raised a total of $126 million in funding over 8 rounds. The latest funding of $759 K that the company raised, came in on September 15, 2022, which was Angel funding. Prior to this, the company raised $37.5 mn came in on December 28, 2021, which was led by Sequoia Capital, and $50 million on July 26, 2021, from a Series C equity round led by Sofina Ventures.
Mamaearth - Growth and Revenue
When Mamaearth was launched in 2016, it had only 6 products in its catalog. The product range now comprises more than 140 natural and toxin-free products that are used by over 1.5 million Indian consumers. Besides, Mamaearth is now available in more than 700 cities.
The company is hailed for the growth it began to achieve since it launched. Mamaearth scaled fast with 30 lahks in revenue within just 6 months of operations. Mamaearth began to sell entirely online, where the customers were new. The brand began to acquire consumers directly. Mamaearth achieved the landmark of 2 crores in revenue, but that was not the best that Mamaearth successfully achieved. The company then onboarded Shilpa Shetty as its angel influencer, thereby ushering in an influencer mom. With this, the company soon reached the milestone of 100K customers, and by 2019, it achieved Rs 25 crore in revenue. By 2020, Mamaearth reached the 100 crore mark in revenue within just 3 years of operation.
With the Covid19 outbreak, Mamaearth simply got a Covid booster in its growth. The physical stores were closed down, but the sales of the Varun and Ghazal Alagh-led brands simply skyrocketed online. The company received Rs 460 crore in revenue by the end of 2021 and in the wake of 2022, it turned unicorn. It is important here to note that Mamaearth has also turned profitable, and is currently eyeing an IPO ahead, with $3 bn of valuation in sight.
Here's delving into the growth highlights of Mamaearth:
- Popularly hailed as the fastest-growing D2C brand in India, Mamaearth crossed the Rs 100 crore mark in just 3 years.
- Prized for its organic products, Mamaearth is Asia’s first brand with a MadeSafe certification
- Mamaearth is recognized for its plastic recycling initiatives, one of the few Indian brands to do so
- The company has Shilpa Shetty Kundra as its brand ambassador, who often speaks of the genuineness of the products that Mamaearth delivers
Mamaearth Financials
Mamaearth drew Rs 943 core in revenues in 2022 compared to Rs 461 crore in revenues in FY21, which shot up 2X times posted in the last fiscal. The domestic sales contributed to around 98% of the revenues of Mamaearth while its global sales formed the remaining portion, which also witnessed a growth of 10X. The Varun and Ghazal Alagh-led brand also turned profitable in FY22, thereby Mamaearth posted a profit of INR 19.8 Cr in FY22 as against a loss of INR 1,332 Cr in FY21.
If we see it on a unit level, it can be discovered that the company spent Rs 0.95 to earn a single rupee of operating revenue in FY21. Besides, Mamaearth has also greatly improved its EBITDA margins, which are now reported at 6.5% during FY21 from around -5% in FY20.
Mamaearth - Partnerships
Mamaearth partnered with Anita Hassanandani on February 26, 2021. Tv veteran Anita had delivered a baby boy and this is what makes the company's strategic partnership with the new celebrity mother so relevant. With this collaboration, Mamaearth will be expecting growth in the hair care, skin care, and baby care categories.
Mamaearth rolled out its national television commercial on March 2021, which is a 30 seconds film followed by a shorter 15-second edit where Shilpa Shetty Kundra partnered with the brand to advocate for Vitamin C facewash that Mamaearth brings in for its customers. This film was solely dedicated to promoting the tagline "Goodness inside."
The organic customer products brand partnered with Ribbon, the film that starred Kalki Koechlin and Sumeet Vyas in 2017, prior to its release on 3rd November. It became the 'Official Mama’s Partner’ for the movie.
Mamaearth - Startup Challenges
Every organization faces problems in its early years and Mamaearth was no different. Early in its launch, Mamaearth was hit with a growth hurdle wherein it was not able to expand as desired. The team realized the problem had to do with not being sharp about the target cohort, which lead to futile marketing expenditure coupled with minimal customer acquisition.
The core team did an internal rethinking and arrived at the decision to redefine the target group as well as the communication strategy around the target group. Once the team implemented the strategy, it could see significant gains in a short period.
The cosmetics industry is packed up with several dominant companies consisting of both foreign and Indian players that keep up constant competition in the space.
Mamaearth - Competitors
Mamaearth faces immense competition directly and indirectly from MNCs such as Himalaya and Johnson & Johnson as well as e-commerce portals like Nykaa. There are several companies, including both corporates and startups that boast of several products from the categories like baby apparel, baby toys, and baby accessories, which compete directly with Mamaearth.
On the other hand, the cosmetics industry is dominated by organized players like Johnson & Johnson, Kimberly Clark, Procter & Gamble, and Unilever, which also act as rivals to Mamaearth. Besides, more and more companies are popping up with the toxin-free ideology nowadays and increasing the overall competition of Mamaearth.
Mamaearth - Awards
Mamaearth has been awarded the Young Turks Startup of the year category at CNBC-TV18's India Business Leader Award 2022.
Mamaearth was recognized as “One of the Best Brands” in India at the 2nd edition of The ET Brand Festival in 2019.
Mamaearth - Future Plans
“Our plan is to build Mamaearth into an Rs. 500 crore brand by acquiring five million new consumers in the next three years. We are also looking at launching more brands under the Honasa umbrella, which would be focused on the needs of the new-age, millennial consumers,” Ghazal & Alagh adds.
Furthermore, the company also aims to cement its brand awareness in the upcoming years with the help of influencer marketing and targeted digital funnels.
Mamaearth might be going for an IPO in the next 12-15 months, reported sources close to the company. A potential public listing for Mamaearth is heard of in FY24.
FAQs
Is Mamaearth an Indian Brand?
The Mamaearth company is an Indian unicorn brand and is based out of Gurugram, Haryana. It was founded by Varun and Ghazal Alagh in 2016 to provide toxin-free, natural baby care, skincare, haircare products, and more for babies and everyone else.
Are Mamaearth products good?
Mamaearth proclaims itself as Asia’s first brand to be certified 100% non-toxic by "MADE SAFE". The ingredients used to manufacture Mamaearth's products are entirely natural. Thus, they are safe to use.
Is Mamaearth Ayurvedic?
Mamaearth is an innovative brand that uses Ayurveda and science to develop natural, toxin-free products.
Who is the owner of Mamaearth?
Mamaearth founders are Varun Alagh and Ghazal Alagh. However, the majority stakes of the company are with Varun Alagh, who holds 38.72% of Mamaearth's stakes.
Is Mamaearth organic?
The products delivered by Mamaearth are 100% natural and manufactured using organic and safe ingredients. Mamaearth takes pride in promoting non-toxic and chemical-free products.
Is Mamaearth vegan?
Mamaearth is certified "cruelty-free" by People for the Ethical Treatment of Animals (PETA). It does not promote or conduct animal testing.
Is Mamaearth Shampoo sulfate-free?
Mamaearth relies on natural ingredients. Its shampoo is sulfate-free and does not harm the user.
Is Mamaearth available in stores?
Mamaearth products can be found in stores. One can also purchase them online at discounted rates.
How do you buy Mamaearth products?
Mamaearth products are sold online at Nykaa, Amazon, and such as well as in brick-and-mortar medical stores.
