Varun and Ghazal Alagh of Mamaearth have gone from having six chemical-free products for small children to over 60 in just three years
Scroll through the 260-plus customer reviews and about 86,845 ratings of Mamaearth's 'Easy Tummy Roll On for Digestion & Colic Relief with Hing & Fennel' on Amazon, and you would get a fair idea of what this newbie company is all about. Mamaearth is working on parental stress.
The roll-on is "an all natural essential oil solution" that can be used for stomach related issues in babies. This, and the start-up's other products, are free of toxins and thereby safer for babies - a whitespace that founders Varun and Ghazal Alagh saw when they started out in the winter of 2016.
The couple were looking for chemical-free products for their child, Agastya, but found only a few. A majority of the baby brands available had toxins such as parabens and phthalates, apart from fragrances, and mineral oil. "We started our research and realised that it was possible to launch a reasonably priced brand in India with the best of ingredients," says Ghazal.
In two-and-a-half years, Mamaearth has tread quite a bit. Initially, the firm launched six products for babies that included shampoo, body wash, lotion and mosquito repellents. Now, it has over 60 products and has diversified into things that new mothers can use post-pregnancy. A nipple butter (gives relief to sore skin due to breast feeding); epsom bath salt (for relief from back pain and swollen feet); under-eye cream; face mask to cure melasma. The start-up has sold over one million products to over 300,000 consumers across 150 cities, clocking gross revenues of Rs 25 crore in 2018/19. It plans to grow four times in 2019/20 to Rs 100 crore.
Change of Pace
The fast-paced growth underlines changing times, both in terms of consumers and distribution. The urban, millennial consumer bothers about health and is ready to pay a premium for natural products. Some of Mamaearth's products can cost Rs 700 and are 15-20 per cent costlier than similar products that competition sells. Moreover, there is new infrastructure available such as e-commerce platforms and many more supermarkets than a decade ago. There are enough third-party logistics providers too. Newer consumer engagement platforms are making marketing easier - mom bloggers, for instance, form an effective community to influence sales.
"If I had the same start-up 10 years back, we would probably have been just in Gurgaon and Delhi doing modern trade stores. Digital has solved all these problems," says Varun. The start-up, he says, is not just a Fast Moving Consumer Goods (FMCG) company; it is an "Atomically Fast Moving Consumer Goods" (AFMCG) company.
Mamaearth started off selling only online - through its website, on Amazon, Flipkart, FirstCry and Nykaa. Now it pursues a blended model with a fair sprinkling of offline stores. "The biggest problem in brick and mortar is discovery - you are in a 5,000-SKU store. That is the biggest pinpoint of a start-up. The journey has become easier because offline wants us. We are in 500-odd stores," says Varun.
The time required to build a consumer brand today is shrinking. So is the amount of capital required. Mamaearth, thus far, has raised only $4 million in Series A funding from Stellaris Ventures and Fireside Ventures. Marico's Rishabh Mariwala, who manages Sharrp Ventures, and Snapdeal founders Kunal Bahl and Rohit Bansal are also investors.
Kanwaljit Singh, founder of Fireside Ventures, cites a combination of factors that attracted him to the start-up. "I thought Varun was a very high quality entrepreneur. The clarity of his thinking and conceptualising is good. Ghazal brought in a complimentary skill in terms of understanding of content, and the connect with moms," he says. Ghazal used to be a corporate trainer and had a start-up that offered customised diet plans to consumers. Varun is from the FMCG industry, having worked with Coca-Cola, Diagio and Hindustan Unilever.
Singh feels the kids space is becoming interesting for investments; Fireside has done multiple deals in this sector. He also liked Mamaearth's approach. "Products based on safety and quality make sense. There aren't too many players. And Mamaearth has a wider range of products," he says.
Mamaearth competes with large players such as J&J, Himalaya and Sebamed. Nevertheless, the founders appear confident that consumers will learn about their products and the benefits they offer. And like most start-ups, the founders rapidly innovate to stay relevant.