'A long way to go for the brand to hit a ceiling': Mamaearth's Varun Alagh

"Mamaearth is growing slower than our expectations," said founder Varun Alagh. But he's confident that Mamaearth will become the number-one skincare brand in the country over the next 5-7 years.

By  Mansi JaswalNov 21, 2024 8:58 AM
'A long way to go for the brand to hit a ceiling': Mamaearth's Varun Alagh
Mamaearth's products are available in more than 10,000 Modern Trade stores as of September 2024

After posting a loss of nearly Rs 19 crore during the second quarter of fiscal year 2025, the co-founder and CEO of Honasa Consumer, the maker of Mamaearth, said they have to go a long way to make the brand super successful. Alagh, during the Quarter 2 earning call, said that while brand building playbook has done really well for the company in terms of scaling from the zero to Rs 1,000 crore journey, taking it beyond this has become tricky.

"We still believe there is a long way to go for the brand to hit a ceiling, while short-term demand pieces could be there, but we wanted to look at it more structurally and that's the exercise that we have been doing over the last, three-odd months in terms of understanding structurally, where could we be sort of, missing the trick," Alagh said.

However, the 40-year-old entrepreneur exuded confidence, saying Mamaearth will become the number-one skincare brand in the country over the next 5-7 years. "We just need to get our game right to get it there and that's the body of work that we are actively doing".

In a BSE filing by Honasa, the company metioned that, "Mamaearth is growing slower than our expectations and we are making identified structural changes to bring it back to its growth trajectory in a few quarters".

Alagh mentioned that the company is focusing on 4-5 key areas to strengthen its position in the perennially competitive industry. For instance, Honasa Consumer, Mamearth's parent firm has increased its efforts on understanding consumer behaviour, investment, innovation, R&D, and improving inventory.

'Strategy for consumer boredom'

Alagh said that the competitive intensity in the beauty and personal care segment is higher, specifically in the online world, therefore innovation is important in the online space. Calling the offline business of the company a "hero product business", he added, "Getting the game right is very critical as we move forward, which is where optimal investments on hero products, getting them in the right sizes, distributing them in the places and focusing very strongly on that is something that we will need to dial up".

"Our objective is to become top three in share in face washes, number one in sunscreen, number one in serums, and get into top three in another couple of categories that we define for ourselves. Nationally, not just online," Alagh said.

'Race against decades-old brands'

On competing against age-old personal care brands, Alagh said a generation shift happens from consumers and that shift is actually an opportunity for brands to sort of take ownership. "There is clearly a lack of brand choice which has been there in the country in the past and that is not just for the online consumers, but across offline consumers as well It's the entire consumer landscape where there has been a dearth of brand options and in my view, right kind of brands built on right propositions is something where there is new brands have the right to sort of win there and that is one area. Second is, of course, we need to provide products and propositions which are emotionally and functionally superior compared to what the consumer is using".

Alagh aims to open 2 lakh direct outlets nationwide and said "If we are able to get that, this is where 80% of the weighted distribution game is being played and that is where almost all of the mass premium proposition consumers are going to buy".

Mamaearth's products are available in more than 10,000 Modern Trade stores as of September 2024.


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    First Published on Nov 21, 2024 8:55 AM

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