Mamaearth Business Model: How Does Mamaearth Make Money
🔍Insights
Launched in 2016 Mamaearth has made more than 5 million customers in just a few years. It is Asia's first company that has been certified by Made Safe.
It is competing against big companies like Himalaya and Johnson & Johnson. But, how did Mamaearth capture a big share of the market in such a short time? To answer this question we need to understand the business model of Mamaearth.
About Mamaearth
Mamaearth Target Audience
Mamaearth Business Model
What is Unique about the Business Model of Mamaearth?
How Does Mamaearth Earn Money?
Mamaearth Marketing Strategy
Mamaearth Competitors
About Mamaearth
Mamaearth is an Indian brand registered under Honasa Consumer Pvt Ltd that aims to provide toxin-free baby care, skincare, and hair care products.
The founders of Mamaearth are Ghazal Alagh and Varun Alagh. The headquarters of Mamaearth is in Gurugram, Haryana. The tagline of the company is Goodness Inside.
Mamaearth Target Audience
Initially, Mamaearth's target audience was mothers and their babies, offering baby care, pregnancy care, and skin and hair care products. The company also sold accessories, toys, and apparel.
Then the target audience of Mamaearth expanded by targeting the millennial generation by selling more chemical-free skin care products like serums and creams, face wash, lotions, and hair oils.
The company also targeted men by offering products like aftershave lotions, and beard and hair oils.
Mamaearth Business Model
| Unique Aspects of Mamaearth's Business Model | |
|---|---|
| Formulation and Manufacturing | Mamaearth formulates products for manufacturing by contract producers under their brand. |
| Sales Channels | Primarily online through D2C platforms like Amazon, Flipkart, supplemented by offline stores, ensuring an omnichannel presence. |
| Global Reach | Products are sold globally through both offline and online channels. |
The business model of Mamaearth is straightforward. The company formulates products that contract manufacturers later produce under the permit of the Mamaearth brand.
Mamaearth mainly sells online through D2C Channels like Amazon, Flipkart, etc., and other offline stores. They have an omnichannel presence. The entire product range is manufactured by contract producers under the Mamaearth brand and is sold globally through both offline and online channels.
Rishabh Rathi
What is Unique about the Business Model of Mamaearth?
Connecting with their Target Audience
The most important thing for any brand is to connect with its target audience and gain their trust. This is what Mamaearth did brilliantly. From the start, they targeted mothers and made advertisements that resonated with them.
As the founders themselves got the idea of Mamaearth when they were looking for toxin-free and natural baby products online, they knew what parents wanted for their babies.
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.
Kanimozhi Sivakumar
Superior Quality Product
The founders of Mamaearth believe in providing quality products to their customers.
As they have a superior quality product, people themselves recommend their products to other people. Word-of-mouth marketing has done miracles for their brand.
In 2019 Mamaearth got the “One of the Best Brands” in India Award at the 2nd edition of the ET Brand Festival.
The company has come up with unique products that have attracted many people.
Some of their unique products include India’s first bamboo-based baby wipes, 100% natural plant-based toothpaste for children, and skin and hair care products with natural ingredients like onion, CoCo, charcoal, and ubtan.
Lean Innovation Cycle
Lean innovation follows a principle where you focus on increasing efficiency by continuously listening to your customer’s feedback. Your main priority is experimentation and continuously improving your product quality.
Lean innovation helped Mamaearth to understand its customer needs and fulfill those needs immediately.
Experimentation helped them to increase the quality of their products and also to generate new product ideas. In a very short time, they satisfied their customers using this method.
How Does Mamaearth Earn Money?
The customer acquisition strategy of Mamaearth is completely focused on digital content.
Almost 70% of the sales of Mamaearth products come from online platforms.
Their main aim is to sell as many products as possible online, with their revenue model focused on earning money through sales on Flipkart, Amazon, and other similar eCommerce websites.
Interestingly, only 20% of Mamaearth's revenue comes from baby products.
On the other hand, 80% of the revenue comes from skincare and haircare products.
As Mamaearth comes in the personal care category they enjoy a healthy gross margin profile of about 65%. So, they can invest 40-50% of revenue in marketing.
| Revenue | FY21 | FY22 | FY23 |
|---|---|---|---|
| Revenue from online sales | 81.37% | 69.91% | 59.36% |
| Revenue from offline sales | 18.63% | 28.87% | 36.14% |
| Revenue from services | - | 1.22% | 4.5% |
Over the past three fiscal years, online sales revenue of Honasa (parent company of Mamaearth) decreased from 81.37% in FY21 to 59.36% in FY23, while offline sales increased from 18.63% to 36.14%. Revenue from services, starting at 1.22% in FY22, grew to 4.5% by FY23.
Mamaearth has successfully raised $89.4 million across 7 funding rounds, with the largest round amounting to $65.3 million. This funding has been secured from a diverse pool of 14 investors.
Mamaearth Marketing Strategy
Influencer Marketing
Mamaearth has worked with a lot of influencers on the internet. Influencers have helped the company to reach a wider audience.
Influencers tell the benefits of these products on various social media platforms. Mamaearth also works with five hundred mother bloggers to spread awareness about the brand.
Brand Endorsement
Collaborating with Bollywood actress Shilpa Shetty Kundra as a brand ambassador has to be their best marketing strategy. Shilpa Shetty has a lot of popularity, so her becoming a brand ambassador of baby products and also an investor hugely benefited Mamaearth.
Additionally, the company introduced an integrated marketing campaign for their onion shampoo, showcasing Sharmila Tagore and brand ambassador Sara Ali Khan. Furthermore, Samantha Ruth Prabhu lends her endorsement to Mamaearth's skincare products.
Digital Ads
Mamaearth majorly promotes itself through digital ads. They have smartly utilized digital ads and increased their customer base. Their ads are very catchy and symbolize their brands in an effective manner.
Poonam Chauhan
Mamaearth Competitors
The competitors of Mamaearth are as follows:
- The Moms Co
- Lotus Herbals
- Johnson & Johnson
- Marico
- Emami Limited
- Bey Bee
Conclusion
At its core, Mamaearth’s amazing products helped them to reach great heights. They have understood their customer's needs properly and served those needs in an excellent way. Mamaearth is an inspiration for many startups. Their business and revenue model is simple yet effective.
FAQs
What is Mamaearth?
Mamaearth is an Indian brand registered under Honasa Consumer Pvt Ltd that aims to provide toxin-free baby care, skincare, and hair care products.
What are Mamaearth products?
Mamaearth mainly deals with baby-care products including accessories, toys, apparel, pregnancy care products, and skin and hair care products.
Is Mamaearth an Indian company?
Yes, Mamaearth is an Indian company founded by Ghazal Alagh and Varun Alagh. It was launched in 2006 and the headquarters is in Gurugram, Haryana.
How are Mamaearth products sold in the market?
Mamaearth products are sold through eCommerce websites like Flipkart, and Amazon, and also via offline stores.
What is the tagline of Mamaearth?
The tagline of Mamaearth is Goodness Inside.
What is Mamaearth USP?
Mamaearth's USP lies in its commitment to providing natural, toxin-free products specifically designed for mothers and their babies. The brand emphasizes safety, environmental sustainability, and cruelty-free practices, ensuring that all products are made from natural ingredients and are safe for both children and the environment.
Does Mamaearth manufacture its own products?
The entire product range of Mamaearth is manufactured by contract producers under the Mamaearth brand and is sold globally through both offline and online channels.
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