It could have easily deterred Vineeta Singh, from pursuing her entrepreneurial interests after the failure of two startups. Her ambition to become an entrepreneur to start something of her own was ingrained in her since she was 17. Being a graduate of the premier engineering and business schools IIT and IIM-A, it would be foolish for anyone to decline a high-paying investment banker job. And, yes it did happen. To her parents’ surprise, Vineeta declined a high-paying job paying a handsome amount of Rs 1 Crore to follow her dreams of starting a venture. At 23, she moved out to Mumbai in a pigeonhole apartment with a shoestring budget carrying high aspirations. Today, Vineeta Singh co-founder of Sugar Cosmetics is one of India’s fastest-growing premium cosmetic companies, with a cult following among millennials, especially among the brave independent women. The brand lies between premium and mid-range with an average selling price of approx. Rs 750.
A failed startup became the path of success
It is a normal human tendency to look and admire an individual’s achieved success and fame but unfortunately, the success story forms a smaller fraction of the iceberg. Failures are the ones that drive ideas to fruition and the same happened with the inception of Sugar Cosmetics. The year was 2012 when e-commerce shopping was catching up quickly in India with a significant number of women having disposable income. Vineeta, already passionate about building a consumer business for women felt apt to begin her second venture Fab Bag, which was a subscription business that offered women an assortment of beauty and cosmetics products from global brands every month delivered at the doorstep for a small fee. The venture ran for a good number of nine years and amassed 200,000 customers. But, the subscription model did not work among individuals who found themselves locked into a subscription that prevented them from trying new products, which became the reason for failure for Fab Bag. However, the failure was an eye-opener for Vineeta who learned from the data of a close-knit community of women customers from the previous venture that the beauty and cosmetics space in India is largely dominated by foreign or local brands that do not cater to the deeper Indian skin tones, skin problems, and preferences. Moreover, such cosmetic products and brands are lacking in India where the makeup has to be long-lasting and matte that does not come off when women travel by public transport on local trains or polluted roads.Gathering such insights, Vineeta Singh and her husband Kaushik Mukherjee teamed up to begin a venture in beauty and cosmetic products designed high on style and high on performance for the tech-savvy, outgoing, employed Indian women of today and thus birthed Sugar Cosmetics in 2015.
Vineeta declined a high-paying job paying a handsome amount of Rs 1 Crore to follow her dreams of starting a venture.
New mother and business: A tough road
Unlike, its brand name the road for Sugar was not sweet initially. Juggling between new motherhood and her entrepreneurial dream Vineeta led to a hectic schedule. Business and entrepreneurship generally perceived as male domain hindered Vineeta to source funds. Once she met an investor who refused to talk to her since he wanted to have the business talk with a ‘man’.
There were several sleepless nights when one hand had office files and the other held a newborn baby.
Like every other retail or e-commerce brand, Sugar Cosmetics too faced the problem of managing the credit cycle since it is the key to keeping the working capital cycle to a bare minimum to ensure efficient capital use and rotation. They had set up a separate unit that monitored the credit cycle daily to manage finances efficiently.
These struggles were part of the venture’s success that rose to become the best lipstick brand. It took 5 years for Sugar Cosmetics to build a team of 1500 of which 75 percent constitute women.
Sugar Cosmetics: Selling cosmetics through screens
Sugar Cosmetics realised a dearth of education and awareness in the market regarding cosmetics and beauty products. Women wanted to know how to use an eyeliner before purchasing one. At the same time, affordable smartphones and internet connectivity ensured every millennial was consuming plenty of digital content. It was also the time of budding influencers who began teaching makeup or recreating the makeup inspired by the actresses in popular web series, films, reality shows, etc. Their most popular videos include one with acid attack survivor, Anmol Rodrigues. An average millennial Indian girl wanted to look beautiful inspired by the global trends, so precisely a global trend had to be Indianised for her. Sugar Cosmetics harnessed the loyal fanbase of makeup influencers on platforms of YouTube, Instagram, and Facebook by sending them PR packages to create content on makeup for several occasions such as weddings, festivals, office no-makeup look, etc., using Sugar Cosmetics products. By working with influencers of different Indian skin tones, the viewers found confidence in the products and thus Sugar Cosmetics emerged to be the digital-first brand in cosmetics.
Indians love buying from retail
Indians are risk-averse where they are scared about shopping from e-commerce. Women were impressed with the unique colour range and had never seen before formulation of Sugar Cosmetics but was sceptical about purchasing it online. The visitors would come to the website two or three times and refrain from buying it because they were not convinced that they could try a new brand just based on some influencer telling them that this is a good lipstick or blush. On analysing website visit numbers they found that a customer would spend 65 minutes, in two, three different visits before the actual purchase decision is made. This signalled their foray into physical retail stores and to become an omnichannel cosmetics brand. The business would also scale from there since it is easier and quicker as the process of buying from a physical store occurs naturally to the customer such as testing the foundation, trying various swatches to select the best shade that goes with the skin tone, etc., also not to forget the social media push. In February 2019, Sugar opened its first owned store in n Forum Mall, Kolkata, in a space cluttered by M.A.C and Forest Essentials. By February 2020, offline sales accounted for 60 percent of Sugar’s revenues. Presently Sugar’s offline presence is in more than 2500 outlets in over 130 cities.
Sugar cosmetics expanded during the pandemic
The grim times of the pandemic could not dwindle Sugar Cosmetic’s profits. April-May the initial months of the first covid lockdown the company made zero sales. Unlike, most retailers who decided to close stores, Sugar went ahead and added more physical stores to its count, by strengthening its content marketing game on social media resulting, in addition of monthly impressions of 240 million from 100 million, got 1 million followers and Instagram and their app has witnessed more than 800,000 downloads. It was a strategic move since right after the lockdown restrictions were eased the stores prepped themselves for the festive season clocking Rs 100 crore with maximum sales registered in November. In April 2021, it achieved unicorn status.
Success for Vineeta Singh and Kaushik Mukherjee at Sugar Cosmetics is a well-devised plot. In a short span of seven years, Sugar Cosmetics has grown to become a Rs 100 Crore company, when big players such as Lakmé, L’Oréal, and MAC Cosmetics dominated the market. Besides, the failure of two startups, her indomitable spirit of becoming an entrepreneur did not die down. For a venture to succeed, struggles and hardships are part and parcel, one has to be ready for it. Sugar Cosmetics’ perfect product-market fit to its vocal, opinionated, well-informed customer and keeping customer persona at the centre of the strategy s probably one of the most fundamental reasons for their success so far.