An analyst in Jefferies India Pvt. Limited has said that Mamaearth, which is managed by Honasa Consumer, currently has an annual revenue run rate of over ₹700 million rupees ($ 100 million).
Analysts at the brokerage agency have studied the explanations behind Mamaearth’s remarkable development in just 5 years of startup.
In a report published on April 12, Jefferies analysts said: “From a meager revenue base of Rs 17 million in the 2019 money year, Honasa Shopper has seen a meteoric rise with 2021 money income of approximately ₹500 million rupees. The basic portfolio has grown adequately and the new launches have also contributed ”.
How did Mamaearth come about?
Mamaearth was founded by a couple, Ghazal Alagh Y Varun alagh, who were struggling to find the right products for their child. Like any vigilant parent, the couple did their best research on commercially available baby products before purchasing. To your surprise, most baby products, whether they are lotions or shampoos, contain toxins that have been shown to be harmful.
Concerned not only for their own child but for all the little ones, the couple decided to do something about it and create products that were completely safe and certified toxin-free. This is how Mamaearth was born in 2016.
What led to its growth and success?
The brand has been awarded as Asia’s first personal care brand with MadeSafe certified toxin-free products for mothers and children and is endorsed by Sequoia India, Fireside, Stellaris, Titan Capital and the Bollywood actress and entrepreneur. Shilpa shetty.
Expansion of the product range
Over the years, the brand has expanded its product range from baby care products to other fields, particularly hair care and skin care. According to the report, of all Mamaearth model revenue, 20% comes from the baby product range, while the remaining 80% comes from the skin and hair care range.
His income is derived primarily from his personal D2C platform, e-commerce channels, and offline sources.
Market placement and advertising
In addition to expanding its target market, another reason behind the corporate growth in such a short period of time is its ‘strong model positioning, product innovation, advertising excellence, and increased retail reach and distribution’ according to Jefferies.
Being within the private care class and its massive premium positioning, Mamaearth enjoys a healthy gross margin profile of around 65%. This gives the company enough headroom to spend money on advertising (40-50% of revenue in FY19 / FY20) and increase people’s capabilities.
Given its strong development, Ebitda loss (as% of revenue) decreased from around 27% in FY19 to around 7% in FY20. According to management, the company turned positive for Ebitda in fiscal year 21 and plans are to achieve a solid double-digit Ebitda margin in the medium term, according to the Jefferies report.