There has been significant activity in the Indian beauty and personal care landscape in the past 12 months. As per a report by Avendus Capital, 800+ DTC brands have launched in India, out of which 80+ are in the beauty & personal care category. The number is touted to increase multifold in the coming months.

Just like China, India has seen its consumers shift online accelerated by the pandemic, to the advantage of the DTC beauty brands established over the past five years.

The snapshot of the beauty market by 2025 predicts ~ 900MM internet users and 500MM active social media users (52% of these Millennials & Gen Z), and a 4.8X increase in online beauty shoppers in India from 25MM in 2020 to 122MM+ in 2025.

Several factors have contributed to this growth, including a shift towards clean and environmentally friendly products, an increasing concern over personal grooming driving the demand for beauty and skincare brands, and the phenomena of social discovery and education on the internet.

Considering 45% of the demand for beauty is in Tier 2 and 3 cities, the lack of retail infrastructure make brand.com, marketplaces, and beauty platforms the prominent channels to access these cities.

Indian DTC Brands vs US DTC Brands

In the US, DTC beauty brands are popularly digital natives with touch points on social media, and are equipped with an explicable e-commerce/Shopify store. They have used the power of influencer marketing and star power for their growth and reaching a wider set of target audience.

In India, DTC brands that have risen to dominate the landscape launched with an online e-commerce presence, but very quickly developed a retail footprint too. For example, Sugar Cosmetics falls in the DTC category but is available in over 35,000+ retail touchpoints (including own stores in high street markets, exclusive brand outlets and kiosks in prime malls, along with a presence in major modern trade and general trade outlets). Sugar aims to grow to the range of 50,000+ retail touchpoints in India and even internationally. Brick-and-mortar stores of DTC brands make room for experiential elements in buying, and hosting “feature-and-benefit” conversations among customers and sales staff—a step in the direction of holistic and need-based custom solutions for their consumers.

Custom, Friendly, and Customer-Friendly Solutions

D2C attracts and appeals to the consumers in India who seek personalized products that the big legacy players were not serving. An excellent example can be found in the work of entrepreneurial couple Ghazal and Varun Alagh (founders of Mamaearth), who developed baby skincare products for the entire nation during their time researching the dos and don’ts for their newborn’s skincare. Over time, their product range expanded as customer behavior began to lean towards skin and personal care.

Indian customers have a history of sampling products in-store with respect to the choice of color, shade, quality, etc., to proceed and foster their buying decision, in tandem with the more cautious behavior of ordering products online from a website. With the unprecedented yet inevitable scale of digitization during the pandemic, there has been an increase in the comfort of online shopping like never before. Diagnostics and consultation of skin types, personalized solutions, and virtual try-on with VR integrations on e-commerce sites facilitate a seamless buying experience.

The Indian customer has become “woke” in every sense of the word. With increased smartness, it wants nothing short of what best suits its needs. In 2021 alone, India’s internet search interests saw a 533% increase in the key words “DTC brands.” Seeking the convenience of personalized products, online shopping, cheaper smartphones and internet services, and growing awareness of natural/chemical-free products, buyer preference has steered towards DTC both online and offline.

With women making their buying decisions from social stores, the majority of DTC brands have begun to cater to women’s needs with changes at the formula level of their products. It has been noticed that there is a significant increase in buyers for face masks, body scrubs, and serums.

With proper marketing and lucid brand communication, there has been a rise in the aspirational quotient of the consumers. Traditional players of the industry (Lakmé, Olay, etc.) maintain pricing that is economically feasible for consumers belonging only to the Tier 1 cities of India. On the other hand, DTC brands have made efforts to market to customers in Tier 2 and 3 cities with offline presence, TV commercials, etc., and have maintained a friendly price point with top-quality products.

Brands are redoubling their efforts to retain women shoppers from Tier 2 cities as they have noticed and valued the aspirational quotient of women from cities and towns irrespective of size. About 45% of overall online transactions take place within Tier 2 and Tier 3 cities as per the latest KPMG report on beauty and personal care shopping.

Top Indian D2C Brands to Look Out for Are:

MyGlamm, dubbed “India’s fastest-growing direct-to-consumer beauty brand.” The philosophy behind MyGlamm is to build a community with its users, engage with them, and eventually co-create products with them. MyGlamm acquired POPxo & Plixxo in August 2020, laying the foundation for the largest Content to Community to Commerce platform in South Asia.

Nykaa, India’s #1 beauty retailer, started its own private-label beauty line in 2015. Nykaa Cosmetics is the brand’s affordable makeup line; Nykaa also launched its Nykaa Naturals line of Shower Gels, Lotions, Creams, and Oils. Nykaa recently launched a skincare line called SkinRX. Nykaa has been funded by KKR, Steadview Capital, Lighthouse Capital, and TPG, and opened their IPO on Oct 28, 2021.

WOW Skin Science is a nature-inspired beauty brand that has been committed to curating safe skin and hair care products for everyone to use. Their products are free from sulfates, silicones, mineral oils, parabens, and artificial colors. Over time, WOW Skin Science plans to build a strategic business and expand globally.

Mamaearth, a brand, by parents, for parents. Its products are developed from world-class research, and it strives to solve every type of problem parents face. Mamaearth aims to make products that are mum-baby friendly, toxin free, and meet all the stringent international standards.

SUGAR Cosmetics is a cruelty-free brand that has high standards when it comes to using only the highest-quality ingredients in its makeup products. The brand ensures that its cosmetics, manufactured in state-of-the-art facilities around the world, cater to all skin types with personalized solutions.

Corporatization and Conglomerates Happening in the Digital Space

In the interest of building brand reach and loyalty among its audience while informing and entertaining them, brands have begun to proliferate into something bigger than just one brand, and have adopted a “house of brands” model that caters to every consumer need—from products and content, to content creators that promote products. It is like an all-digital conglomerate made to have an unprecedented omnichannel–omnicategory presence.

Conglomerates, among them the likes of Mensa Brands, G.O.A.T Brand Labs, and The Good Glamm Group, have shown progress in increasing the D2C tie-ups and scaling them to grow bigger.

Closing Remarks: The DTC space in India is lucrative in all its vibrant shades. With the amount of time consumers spend on the internet and their desire for unique products, the DTC brand model is a surefire way to establish yourself in a growing market.