The Derma Co Achieves Rs 500 Crore ARR Milestone

In the last fiscal year, The Derma Co, a skincare brand from Honasa Consumer, sold over 1 crore units, reaching an annual revenue run rate (ARR) of Rs 500 crore in April. This makes it the second brand in Honasa Consumer's portfolio to achieve this milestone, following Mamaearth.

Speaking at Goafest, Zairus Master, Chief Business Officer at Honasa Consumer, noted that each brand in its portfolio is at a different stage of development, and the company assesses and supports each brand based on its specific needs at any given time.

Honasa Consumer operates seven brands: Mamaearth, The Derma Co, Bblunt, Ayuga, Aqualogica, Dr. Sheth’s, and the newly launched color cosmetics brand, Staze.

Edited Excerpts:

How do you focus your marketing efforts for each of these brands within your portfolio?

We recognize that each brand in our portfolio is at a different development stage, requiring unique support. Our approach isn't to prioritize one brand over another but to assess and provide the necessary inputs for each brand based on its specific needs. Even within similar categories, our brands have distinct propositions. For instance, Mamaearth emphasizes natural, made-safe products; The Derma Co focuses on active ingredients, crucial in skincare; Aqualogica caters to the Indian climate with water-infused products suitable for tropical conditions; and Dr. Sheth’s offers a blend of actives and naturals. Each brand maintains a clear, differentiated proposition within the same category, ensuring they complement rather than compete with each other.

In terms of distribution, Mamaearth has a strong offline presence. The Derma Co is expanding offline but focuses on premium beauty, modern trade, and segmented general trade channels. Our newer brands are primarily online at this stage.

How has quick commerce impacted Honasa?

Quick commerce has significantly impacted us. We partnered with quick commerce platforms early on as they transitioned from essential groceries to beauty products. This taught us that customers buy the same products they would normally purchase, just with the added convenience of 15-minute delivery. Our goal now is to leverage this insight to increase our market share in quick commerce. Although quick commerce currently represents a small portion of our overall sales compared to traditional and online channels, it is one of the fastest-growing platforms, indicating significant potential for future growth.

How do you handle competition from legacy brands adopting trends introduced by challenger brands like Mamaearth?

Our strategy for Mamaearth focuses on building products around specific ingredients. As these ingredients gain popularity, 'me too' products enter the market. However, once we establish a strong proposition, it becomes challenging for competitors to break into that space. Our primary focus is understanding consumer insights and trends, and launching products that meet those needs. As these spaces grow, fragmentation is inevitable, but we aim to stay ahead by continuously innovating based on consumer preferences.

What is your distribution strategy?

Our direct-to-consumer (D2C) strategy involves a direct relationship with the consumer, not limited to online channels. Our exclusive brand outlets (EBOs) are part of our D2C strategy, with over 110 EBOs currently. We use both direct and multi-brand channels across online and offline platforms. In D2C channels, we build stronger relationships with customers, understanding their preferences and suggesting tailored solutions. Multi-brand outlets offer lower customer acquisition costs. This comprehensive strategy allows us to leverage the strengths of each channel effectively.

Which marketing mediums are you focusing on?

We recognize the significant impact of digital media, especially influencer marketing, on our growth. This medium has consistently proven beneficial, and we continue to focus on leveraging influencers to enhance our reach and engagement.

What are the plans for Honasa this year?

Our focus is on achieving profitable growth and delighting our consumers. We've reached a significant level with our brand and organization, and the key is to maintain our growth trajectory. Innovation drives much of our growth. Personally, I measure success by our ability to consistently innovate. Our consumers expect and seek innovation, looking for better products that meet their needs more effectively. Our passion lies in identifying trends, understanding consumer needs, and launching new products that address those needs.