Sugar Cosmetics - Millennial's Favourite Beauty E-Commerce

Sarika Anand Sarika Anand
Dec 20, 2021 11 min read
Sugar Cosmetics - Millennial's Favourite Beauty E-Commerce

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Sugar Cosmetics.

Until the emergence of e-commerce and Direct-to-Consumer (D2C) selling, the Indian beauty sector had been dominated by cosmetics majors for decades. In the beauty industry, it's difficult to overlook the influence of direct-to-consumer companies like Nykaa, Mamaearth, WOW Skin, Plum, and Sugar Cosmetics, which are quickly becoming customers' go-to alternatives in metros and Tier 1 and 2 cities.

Established in 2015, Sugar Cosmetics came up with just two products, namely, a black matte eyeliner and a black kohl pencil. Since then, the company has grown to 450 stock-keeping units. So, in just five years, what led to Sugar becoming one of the most well-known beauty chains in India?

Sugar Cosmetics - Company Highlights

Startup Name SUGAR Cosmetics
Also Known As Vellvette Lifestyle, Vellvette
Headquarters Mumbai, Maharashtra, India
Industry Beauty, E-commerce, Brand Marketing, Cosmetics
Founders Kaushik Mukherjee and Vineeta Singh
Founded 2012
Current CEO Vineeta Singh
Website www.sugarcosmetics.com

About Sugar Cosmetics
Sugar Cosmetics - Latest News
Sugar Cosmetics - Industry
Sugar Cosmetics - Name, Logo, and Tagline
Sugar Cosmetics - Founders
Sugar Cosmetics - Startup Story
Sugar Cosmetics - Mission and Vision
Sugar Cosmetics - Business Model and Revenue Model
Sugar Cosmetics - Funding and Investments
Sugar Cosmetics - Growth
What did SUGAR get right this time?
Sugar Cosmetics - Competitors
Sugar Cosmetics - Challenges Faced
Sugar Cosmetics - Future Plans
Sugar Cosmetics - FAQ

About Sugar Cosmetics

Sugar Cosmetics is one of India's fastest-growing premium cosmetic companies, with a cult following among millennials. Sugar is the cosmetics of choice for brave independent women who refuse to be categorized into stereotypes, thanks to its clutter-breaking attitude, unique low-poly packaging, and chart-topping products. The brand's bestselling goods in the Lips, Eyes, Face, Nails & Skin categories are sent all over the world from state-of-the-art facilities in Germany, Italy, India, the United States, and Korea.

The brand is devoted to producing products that are a great fit for every Indian skin tone throughout seasons and across the calendar, with a cruelty-free line that is high on design and high on performance. Sugar Cosmetics is aggressively expanding its strong existence with 10,000 plus retail stores by 2021 across 130+ cities with a purpose to reach the doorsteps of every cosmetics user in the country, backed by the faith of marquee investors and the passion of millions of beauty aficionados.

Sugar Cosmetics - Latest News

As of July 2021, Sugar Cosmetics, a direct-to-consumer company, has appointed Suchit Sikaria as its new chief business officer. Sikaria joins the firm as the managing partner of digital marketing agency Performics India (which was founded in 2018 by the combination of heritage companies Convonix and Resultrix).

Sikaria, an IIM-Ahmedabad alumnus, has over 14 years of sales, marketing, and business operations leadership experience with Performics India and Nokia India. He also has four years of startup expertise from his own entrepreneurial business in the food-tech field, which he is expected to use.

"I look forward to bringing in my experience of the industry and building the brand in to a much larger D2C player; not just in the country, but even globally," said Sikaria.

Sugar Cosmetics - Industry

The Indian beauty e-commerce market, which is still in its early stages, might witness a spate of acquisitions over the next 3 to 4 years as smaller, direct-to-consumer (D2C) firms expand up, following a pattern set in the US.

According to a survey published by Harvard Business Review, global yearly consumer expenditure by women is valued at $20 trillion and is expected to reach $28 trillion in the next five years.

The worldwide cosmetics business, for example, is estimated to reach $428.9 billion by 2022. The Indian cosmetics industry is expected to reach $20 billion by 2025, increasing at a CAGR of 25%.

The fact that the customer base wants to have digital experiences is one of the reasons why beauty is shifting toward e-commerce. It's simpler, or indeed lesser time-consuming, for people to go from online material to an online shop now that they can have practically the same "real-life" experience online as they do in stores (personal preferences, samples, etc).

It's not as if individuals began purchasing cosmetics available on the internet just because they could. The companies themselves were the ones that saw the promise of the internet and the need to cater to technology users. And besides, e-commerce is expanding at a double-digit rate each year. As a result, companies must adapt to new terrain to get ahead.

Sugar Cosmetics - Name, Logo, and Tagline

Sugar Cosmetics Logo
Sugar Cosmetics Logo

The company began as an online supplier of natural, paraben-free cosmetics and has since grown in popularity not just in India but throughout the world. Due to the usage of the black and white color combination, the visual identity of an Indian cosmetic business is beautiful and refined while also seeming bold and confident. The company's logo is made up of a wordmark with an emblem on the left, which serves as the brand's signifier and appears on all of the company's cosmetics.

Sugar Cosmetics' slogan says, β€œRule The World, One Look At A Time!!!”

Sugar Cosmetics - Founders

Sugar Cosmetics was founded by Kaushik Mukherjee and Β Vineeta Singh, in 2012.

Founders of Sugar Cosmetics - Kaushik Mukherjee and Vineeta Singh
Founders of Sugar Cosmetics - Kaushik Mukherjee and Vineeta Singh

Kaushik Mukherjee

Kaushik Mukherjee, the Co-Founder, and CEO of SUGAR Cosmetics is a BITS Pilani and IIM Ahmedabad alumnus, and a TEDx speaker. He is also a marathon runner and an Ironman triathlete.

Vineeta Singh

Vineeta Singh is the Co-Founder and CEO of SUGAR Cosmetics, India's fastest-growing cosmetic business. She is a TEDx Speaker and an IIT Madras and IIM Ahmedabad graduate. She is a triathlon as well as an ultramarathon runner.

Sugar Cosmetics - Startup Story

Vineeta's husband and business partner, Kaushik, was working at McKinsey before the two of them started this firm, and she was attempting to build and expand her skills at another firm. The idea of working together had never occurred to either of them, but they had a great deal of respect for one another abilities. And soon, they both realized that they enjoyed various things, such as Kaushik's interest in technology and hers in product development and marketing.

As a result, they decided to team together, with Kaushik working on an eCommerce project and her creating a women's business. They sensed a strong bond that might handle their shared interests.

"We have a long way to go and great goals to achieve! Success to me is having the flexibility and capacity to achieve whatever I want without fear of failure. To be honest, I had my reservations when I turned down the job offer when I was 23 years old. But, in keeping with my concept of having no regrets, I pursued my ambitions. I was quite enthusiastic about being an entrepreneur and starting a business. I simply knew that if I didn't do it now, I'd regret it for the rest of my life, so I went ahead and did it," said Vineeta SIngh.

Sugar Cosmetics - Mission and Vision

Sugar Cosmetics' mission statement says, "We believe in every interpretation of beauty. Bold to subdued, quirky to crazy, every day to glam goddess! We aim to celebrate every aspect of you, no matter what your style is. So, go ahead and pick your faves."

Sugar Cosmetics - Business Model and Revenue Model

The beauty firm, which operates on a hybrid model, currently has a presence in more than 10,000 sales outlets in more than 130 locations. In the previous two years, its income has increased by nearly 6 times. After the epidemic took a heavy toll, the corporation devised novel strategies to reinforce the trust connection between its brand and its clients. SUGAR Cosmetics found a position for itself in the fast-growing beauty sector and weathered the epidemic by slashing expenses and reorganizing the team, as well as utilizing social media marketing and an e-commerce push.

The team grew from 87 to over 1,750 retail touchpoints in only two and a half years. The team had collected a net income of Rs 105 crore by January 2020 and was aiming for Rs 200 crore. However, the epidemic stymied their expansion goals.

Sugar Cosmetics - Funding and Investments

Date Round Amount Lead Investors
Oct 21, 2020 Series C $21M A91 Partners, Elevation Capital, India Quotient, Stride Ventures
Mar 8, 2019 Series B $12M A91 Partners, Anicut Capital, India Quotient
Jun 1, 2017 Series A $2.5M India Quotient, RB Investments Pte. Ltd.

Sugar Cosmetics - Growth

Sugar Cosmetics grew at a breakneck speed in FY20. With its hybrid online-offline sales, the firm increased its operations by 5.6X in the previous two fiscal years.

Sugar Cosmetics' operating income increased by 82 percent in FY20, from Rs 57.14 crore in FY19 to over Rs 104 crore. Notably, overseas purchasers accounted for 15.4 percent of its revenues, or Rs 16 crore. During FY20, it generated a further Rs 1.4 crore from its financial assets.

The Mumbai-based Direct-to-consumer brand's largest cost center was the purchase of stock in trade, accounting for 38.45% of total expenditure in the previous fiscal year. As the firm lowered its procuring prices with economies of scale stepping in, these payments increased by just 29.2 percent to Rs 48.35 crore, compared to the 82 percent increase in sales.

Social media was one of the most effective tools used by SUGAR. According to Singh, they saw early on that customers were spending more time on their smartphones and engaging with their content on social media. The company leveraged this as a chance to boost its social media presence.

"We used to get around 100 million monthly impressions before lockdown, but that number has already risen to almost 240 million. We recently passed one million Instagram followers, and our own app has over 800,000 downloads," Vineeta revealed.

What did SUGAR get right this time?

After five years, including one during which a pandemic occurred, SUGAR expects to end Fiscal Year 21 with a power-play of over Rs. 150 crores. Anyone building a retail brand in India may learn a lot from their experience.

The "FAB BAG"

The Fab Bag by Sugar Cosmetics
The Fab Bag by Sugar Cosmetics

The "FAB BAG", a cosmetic subscription service, was created by Kaushik Mukherjee and Vineeta Singh in 2012. For Rs. 599 every month, users would get a "surprise" beauty box including a mix of five goods from the categories of cosmetics, bath and body, skincare, haircare, and fragrances.

These items were largely new and unknown brands that were sourced abroad. The FAB BAG experience allowed the team the space, place, and data they needed to figure out who their target market was. SUGAR wanted to position itself as a premium brand because the company's growth hinged on encouraging mass consumers to upgrade or luxury clients to try something less costly.

Premium Products

Despite its tight budget, the team managed to secure their launch items β€” an eyeliner and a kohl pencil – from a reputable German producer. Customers found the 'Made in Germany' badge to be reassuring, and it enabled SUGAR to get off to a good start. The industry has been dominated by gloss eyeliners at the time, but SUGAR decided to develop a matte version, believing that its clients would prefer an item they could use every day. The eyeliner was the first of several product bets that SUGAR would make, and it turned out to be a hit.

Importance of Instagram influencers

The importance of Instagram influencers in beauty business marketing is well-documented. SUGAR jumped on the 'unwrapping videos' and 'before and after' makeovers bandwagon to make people aware. The brand's Instagram influencer approach is well-balanced. Anmol Rodriguez, an acid attack survivor, is featured in one of their most famous videos. Today, the brand has 1 million Instagram followers, much-outnumbering peers such as Colorbar.

Unique Packaging

Sugar Cosmetics Packaging
Sugar Cosmetics Packaging

SUGAR, like many other emerging companies, began with an all-digital strategy. The design partner, Opposite were given the task of creating "thumb-stopping packaging." Opposite devised a strong, graphic approach that incorporates low-poly drawings, aware that the challenger brand needs to appear and feel unique from the prevalent minimal and largely black style.

β€œRather than equivocate with existing players, we decided to embrace the new dynamic – the screen was more important than the shelf, the packaging was more important than the logo.”Abhisek Sarda, Founder, Opposite

Shopify Store

In 2015, SUGAR opened a Shopify store, which it continues to operate. The firm also released an app in November 2019 that has over 800,000 downloads and a 4.6-star rating on Android and iOS. The majority of the internet acquisition approach is still concentrated on social advertisements.

SUGAR debuted on Nykaa, the beauty website, in 2016 when it had a far smaller number of businesses than it does now. By 2017, Nykaa accounted for roughly 80% of the brand's income, and the team admits they weren't sure whether to be "glad or frightened." In any case, it was evident that distribution needed to be scaled. It was extremely simple to go from Nykaa to other online platforms like Flipkart and Amazon. The true issue, Mukherjee concedes, was breaking the code offline.

Sugar Cosmetics - Competitors

Purplle, Lakme, Maybelline, Lotus Herbals, Blue Heaven Cosmetics, Nykaa, Plum, Marico, NewU, Emami are the top ten rivals in SUGAR Cosmetics' competitive group.

Sugar Cosmetics - Challenges Faced

β€œIn FY20, we had hit the β‚Ή100 crore net revenue number. For us, it was more psychological that we can’t go under β‚Ή100 crores. But there came a point when we were unsure, as April and May were very hard. As a company, we have always been close to breakeven and have been very conscious of our bottom line, but in the first quarter of FY21 we saw a loss of β‚Ή5 crores, and we knew we had to bounce back,” Vineeta Singh said.

The impact was worse because retail outlets accounted for 60% of their revenue. As a result, during unlock 1.0, the team rallied to a target of at least 5 crores in net revenue. To deal with the issue, the team had to go through wage cuts and employment reshuffles, according to the founder Vineeta Singh. Despite the difficult circumstances, by the third quarter of FY20, the firm had regained profitability.

When most merchants were reducing their physical footprint, SUGAR moved ahead and increased its number of locations. They have increased their retail footprint from 1000 last year to 2500 this year. This was a strategic move Singh couldn't afford to miss out on. They realized that they needed to increase their investment. They were able to attract seasonal customers since they expanded their area before the holiday season.

By the conclusion of FY21, the firm expects a 40 percent increase in net sales. Singh has big goals for the next five to six years, and she wants to reach a net income of 500 crores.

Sugar Cosmetics - Future Plans

SUGAR Cosmetics has expanded outside India, having a physical outlet in Russia and an online presence in the United States. In FY22, SUGAR Cosmetics intends to increase its offline standalone locations. The brand, which was created in 2015, currently manages 70 outlets on its own, with aspirations to increase that number to 100 by December.

The D2C brand expects to conclude this year(2021) with over two and a half times net revenue compared to last year, owing to continued sales growth and the Christmas season rush.

According to some figures, 95 percent of trading in India still takes place offline. SUGAR intends to use this to extend and enhance its retail base, as well as improve its retail marketing and visual merchandising experience.

SUGAR Cosmetics opened five new brand-owned retail stores throughout the epidemic, putting sanitation and safety first for its retail consumers. To strengthen its D2C channels, the firm is focusing on expanding its mobile app, which has already had 800,000 app installations in less than a year. In 2021, content marketing, strong alliances, and offering new items will all be on the agenda.


Purplle.com - Company Profile | Beauty Startup
Purplle is a multi-brand beauty retailer selling cosmetic and wellness products. Know more about its company profile, business model, success story, etc.

Sugar Cosmetics - FAQ

What does Sugar Cosmetics do?

Sugar Cosmetics is one of India's fastest-growing premium cosmetic companies, with a cult following among millennials.

Is Sugar Cosmetics an Indian company?

Yes, Sugar Cosmetics is an Indian company.

Who founded Sugar Cosmetics?

Sugar Cosmetics was founded by Kaushik Mukherjee and Β Vineeta Singh, in 2012.

Which companies do Sugar Cosmetics compete with?

Purplle, Lakme, Maybelline, Lotus Herbals, Blue Heaven Cosmetics, Nykaa, Plum, Marico, NewU, Emami are the top ten rivals in SUGAR Cosmetics' competitive group.

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