Speaking to CosmeticsDesign-Asia, CEO Vineeta Singh said that like many businesses in India, it experienced a massive loss of sales during the lockdown.
“After the lockdown was announced in March, the company’s warehouses, retail operations, and logistics came to a halt. Our new launches coming from international manufacturing units were stalled.”
She revealed that the team even had to take salary cuts and reshuffle jobs to deal with the crisis. Despite the tough situation, the company managed to return to profitability by the third quarter and closed FY2020 at a net revenue of Rs 105 Cr (USD14.5m).
“We ensured we focused on adaptive strategies, clear communication and preparing so once the lockdown lifted, SUGAR could hit the ground running. And that’s what happened, by Q3, we were back to more than 150% revenues of pre-COVID levels,” said Singh.
The company is currently at an annual net revenue run rate of around Rs 200 Cr (USD27.5m) and is aiming to double the figure in the next 12 months.
This year, SUGAR is off to a strong start after raising $21m in its Series C funding led by Elevation Capital.
The company intends to invest in new product development to keep ahead of the curve.
“Apart from transfer-proof lipsticks and mask-proof makeup, hybrid products have really caught on in the past few months. Such products have gained a surge in sales for SUGAR through our illuminating moisturisers, lip primers, lip balms, hydrating primers, and more,” said Singh.
The funds are also expected to be used to reinforce the brand’s online and offline distribution to further reach existing and new geographies.
According to Singh, over 500 million of the Indian population still prefer to shop in brick-and-mortar outlets. She predicted that over the next five years, 80% to 85% of the market would continue to shop offline.
“Traditional retail, of course, will continue to dominate the lion's share of colour cosmetics and beauty sales in India but with the democratisation of data and access to low-cost internet, there's a massive Tier 2 and Tier 3 city audiences that are waiting to consume makeup and beauty brands like never before,” said Singh.
As such it's important for the company to expand its physical presence in the market. The company’s goal is to increase its physical retail footprint from 10,000 to over 40,000 over the next 12 to 18 months.
“With the retail industry gradually opening up in India, since September we have been seeing a rise in sale through our general trade outlets, our exclusive brand stores, self-operated kiosks, and shops-in-shop in large format retailers. Even during the pandemic, we have launched nine new brand-owned exclusive retail outlets and kiosks to date.”
Additionally, Singh told us the company would be expanding into the Middle East this year with a well-known retailer in the region.
“We expect that to be a very big launch because we're going in with one of the largest retailers. And we do expect SUGAR to have like a strong affinity with consumers there.”
At the same time, SUGAR plans on expanding its brand-owned website, app and social media channels simultaneously.
Singh said the company would be working towards building an immersive shopping experience online to educate, engage and entertain its consumers.
“We have found a larger value unlocked by investing in a solid online content and earned media strategy that can organically expand the top of the funnel metrics via high-quality traffic and assets that keep on giving.”
The company will also tap into opportunities in the form of its new app, which debuted less than a year ago. Since then it has surpassed a million downloads with 4.7-star ratings across Android and iOS platforms.