Meet Sugar: The “anti-establishment” beauty retailer Indian consumers crave

It’s been quite a year for Indian beauty retailer Sugar, which has just concluded a $50 million Series D fundraise led by the Asia Fund of L Catterton. L Catterton’s strategic partnership with LVMH will also supercharge Sugar’s expansion in the near future.

India’s beauty and personal care market is projected to reach US$21 billion in 2025, and the rising adoption of online shopping and greater product penetration in secondary cities are also contributing to the market’s enlargement.

“Consumers are at  the heart of all we do. At Sugar, we are devoted to creating innovative products that  meticulously cater to the preferences of women with diverse skin tones and types who  believe in expressing themselves with high-quality cosmetics and skincare products that  complement their inner beauty,” Vineeta Singh, Sugar co-founder and chief executive officer told Inside Retail.

Celebrating uniqueness

While multinational brands had always dominated the Indian market, their beauty products were not really suited to the skin complexion of the typical Indian consumer. 

“This is why the audience either preferred to source makeup and beauty products from other countries or ended up with incorrect shades that wouldn’t pair with Indian skin tones,” said Singh.

Recognising this underserved market, Sugar cosmetics entered the Indian market around the middle of 2015 to ‘enable women to explore, crack the code and relish in beauty products that were created for them to feel confident in their own skin.’ 

“Our products are more than just the value of the price tag that they command – it will be hard to find products that are more pigmented, longer-lasting and more suited to the Indian skin tone,” she said.

Singh explained that Sugar, as a brand, has always been the “anti-establishment type”, with more of a creator-than-celebrity-led voice. 

This has helped the brand carve out a niche in a cluttered market where brands spend more time talking about discounts than the power of beauty and cosmetics.

“Our edge lies in the fact that we are and will continue to be squarely millennial and Gen Z focused and dedicated to providing more value and better quality than any other competitor in our price range,” she added.

The immediate future

“Strengthening our retail footprint by enhancing the retail marketing and visual merchandising experience, our product line, and our product distribution is going to be of prime importance,” Singh said.

The company is also focusing on its omnichannel presence by simultaneously growing its distribution channels in India and beyond while building an even stronger base on its direct to consumer (DTC) platforms.

“We will continue to build a strong community by focusing on creating solid content to keep educating and engaging our Sugar community across all platforms – digital and otherwise.”

Strategically collaborating with like-minded personalities, industry professionals and presenting the company at events will be part of the mix going forward.  

“While this journey of making it as one of the top three makeup brands in India has been phenomenal, as our next steps, we envision employing more than 10,000 women and a public listing,” Singh elaborated.

The Indian landscape

According to Singh, the beauty and skincare industry in India has witnessed tremendous growth, and it’s been amazing to see the Indian market reflect the same opportunities for unique homegrown beauty brands.

She believes that the beauty industry in India has evolved and undergone a sequence of changes owing to the close attention that brands are now paying to evolving needs of the consumer.

“The beauty boom in India can be attributed to two factors: first, the surge in spending power and disposable income of women, with an increasing number of women and girls indulging in makeup; and second, the brand is connecting consumers through the internet.”

Singh added that with an increase in internet connectivity and accessibility across the country to the digital space, brands now have an opportunity to access an untapped market and build a loyal consumer base.

“Girls and women today don’t buy products only because they saw their favourite celebrity promote it or a friend recommended it to them, but they will do their own research first and then indulge in a product.”

Singh also noted that Sugar’s target market likes to experiment and explore products from different brands to evaluate the best suited ones for their needs and requirements.

Explosive sales growth

Sales at Sugar cosmetics have more than quadrupled over the past three years, and the loyal customer base has been quite taken with the extensive portfolio of high quality products that are on offer.

“Sugar has always pioneered a consumer-first approach and curates products specifically to be on top of consumers’ ever-evolving needs. We invest in customer analytics technology, which allows us to segment buyers into groups based on behaviour,” Singh noted.

These measures have helped them determine general trends and even developed targeted marketing strategies and sales activities. The company has also deployed a unique user interface for its brand owned app to drive education-led engagement.

“As the consumers have moved to an active digital space, our focus has been on curating strong content that caters to educating them on product usage and benefits.” 

Community building is also another facet of its engagement strategy and it has contributed to an increased presence in the marketplace.

The omnichannel experience

E-commerce is of course now part and parcel of the retail experience these days. In the case of Sugar cosmetics, it has been noted that partnerships with general and modern trade stores has been a cornerstone of the brand’s growth.

“Sugar was digital-only until 2017 via our own website and other leading e-commerce partners. We always knew that to build a large business, we would have to make a strong retail play sometime, as we understood that the majority of the Indian audience still prefers to shop offline,” said Singh.

Singh noted that by early 2018, the company ventured into brick-and-mortar spaces whilst focusing on expanding its DTC presence as well.

“One cannot simply define a consumer to be purely digital or retail, with the ever-increasing consumer access to multiple mediums.”

Holistic expansion strategies

In Singh’s mind, an Indian consumer could be introduced to the brand on social media through a referral, followed by their first interaction with the brand through a sampling activity and then only making the purchase via an e-commerce platform.

“In this day and age it’s imperative to map various touchpoints for the consumers and understand what could be their need for purchase.”

The company’s offline expansion started with around 87 general trade and modern outlets with large format retailers in malls in India. This followed with a gradual venture into brand owned kiosks and stores.

“We are thrilled with the progress and milestones achieved, reaching more than 35,000+ retail outlets in total across more than 550 cities. This year has been especially exciting as we have recently launched our 100th brand-owned exclusive outlet in India,” she said.

Singh said that understanding its consumer base and demands from the remote areas of the country goes a long way in maintaining its presence across tier 2 and tier 3 cities too. 

Its retail footprint has also expanded into international markets such as Russia and the Middle East and it is committed to growing further into overseas markets.

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