Anushruti Singh
Long controlled by retail conglomerates, the beauty industry has moved online. The COVID-19 lockdowns have spurred this momentum even more.
Amidst the pandemic, research platform Digital Commerce 360 tracked 53 online merchants in the health and beauty category, who collectively grew their online sales by 37.4 per cent in 2020 year-over-year. This is an increase over 2019’s 30.5 per cent year-over-year growth.
It states that e-commerce penetration for the category grew year-over-year in 2020 to 4.7 per cent compared with the 3.5 per cent e-commerce penetration in 2019. Which suggests that with the number of sales surging globally, the beauty industry is only getting stronger.
If we go by the market statistics curated by Common Thread Collective, the total spending in the segment was up from $483 billion in 2020 to $511 billion in 2021 — and with an annual compounded growth rate of 4.75 per cent worldwide — it’s predicted to exceed $716 billion by 2025. And $784.6 billion by 2027.
For India, the growth in the online beauty and personal care space is expected to reach $4.4 billion by 2025, according to a 2021 report by Avendus. In addition to this, the study also predicts that the number of online shoppers in this space will surge by more than four times from 25 million in FY2020 to 110 million in FY25.
Caught in this frenzy, almost all beauty brands have turned to online channels to drive up their numbers as well as to feed the ever-increasing demand for cosmetics. This has resulted in an array of D2C brands. And they are also delegating their sales through other e-commerce players. At the same time, there has been an awakening and realization about clean and organic beauty products, making it the latest consumer fad with a huge business potential.
The gaps still exist
However, even if the consumer is aware and even curious about what they are using, they usually don’t know where to look for clean, organic and non-toxic self-care products from beyond their known brand radius. Also, today there are many Indian clean cosmetic brands which are making ethical cosmetics, but unfortunately consumers are not aware of them.
Taking note of this, Shweta Gupta and Darshana Balagopal, friends for over a decade, decided to curate a platform to bring the top Indian and international conscious beauty brands together. Which is how Aardae was born.
“We have been friends over the last decade, but it never occurred to us that we would be business partners,” says Shweta Gupta while speaking to SME Futures.
Now as business partners, they have launched Aardae as an online platform in Singapore to cater to South Asian consumers by bringing ethically produced beauty brands together in one place.
“Both of us have experience and expertise in different streams and so we have distributed the work accordingly. I take care of the entire operations, supply chain and logistics since I have an export-import background and have an experience of setting up businesses in the past. Whereas my partner Darshana has a very strong background and ample experience in marketing and brands and product management,”
avers Shweta.
Aardae is for the conscious consumers
Shweta tells us about how they came up with this business idea. “The pandemic gave us a chance to pause, to think and rethink about the many facets and aspects of life. The new lifestyle that we all adopted due to this crisis, is going to be the norm for years to come. There is now a huge shift towards living consciously and we wanted to contribute to this large social impact in our best way. That is when we started doing our extensive market research and analysing the shift in behaviour and markets,” she says.
Aardae was conceptualised when the co-founders noticed a specific gap in the current beauty business scenario – the absence of a conduit that provided top Indian brands with a viable channel for foreign distribution and promotion.
“Earlier people were inclined to be brand centric but now they are into results- driven, Ingredient focused products. And we have millennial brands in India that meet all these demands and have a huge potential Internationally. But due to the gap in the supply chain in the industry, they were not able to attain that stature. And so, we decided to take on such brands by taking care of the entire logistics and supply chain and giving them exposure worldwide,”
says Darshana Balagopal.
They built their business model to fill this gap, with an eye on the phenomenal growth of the global organic cosmetics market, which grew by13 per cent, as opposed to the just 5.5 per cent growth in the overall global cosmetics market.
Today, they have started with over 50 brands such as Dot and Key, Juicy Chemistry, Earth Rhythm, Brillare, Aminu, Neemli Naturals, Purearth and so on, curating them all on one platform.
Singapore as a launchpad
Usually, on an Indian online cosmetics platform, it’s the foreign brands that hold sway for the Indian consumers. However, with Aardae it’s the other way around—Indian brands for South Asian consumers. Talking to us, Shweta and Darshana say that it was a strategic decision to launch in Singapore first.
“We have a lot of opportunities in this space. Singapore was one of the countries which saw a huge wakeup call amidst the pandemic in terms of clean eating habits which led to a huge trend in clean beauty as well,” says Darshana.
According to market research, the global natural cosmetics market was estimated to be worth $36 billion in 2019 and is now predicted to grow to $54 billion by 2027. While researching for markets, they found out that before the pandemic, there was a steady increase of around 20 to 30 per cent in the number of consumers choosing organic, clean beauty products in Singapore. But now the demand has risen up to 70 to 80 per cent.
“And still there was no space dedicated to clean beauty products where they could be reliably curated or defined properly. Seeing this vacuum for a leader in the clean beauty space and the potential of the market like high basket size and consumer behaviour, we launched Aardae in Singapore. Also, this is the only country that connects the west and the east which is quite a diverse arena for us to launch our brand from,” Darshana tells us.
Besides that, both founders believe in Indian products as a comprehensive solution to what today’s consumers want. As an example, they noticed that a few international brands began using key ingredients from India, such as turmeric, saffron and licorice, and promoting them widely, which was keenly acknowledged by all. Hence, they decided to bring the millennial Indian brands that met all these criteria in terms of efficacy, packaging, ingredients, and certifications on an international platform.
However, being an Indian brand and launching in Singapore was a daring and ambitious move. So, they didn’t have it easy. Shweta recalls, “Due to the COVID restrictions, Singapore was the most stringent country in terms of rules. Being an Indian start-up, we had to manage everything remotely from India without being physically present there. But with the help of great professional companies, we managed to pull it off in the best way possible.”
Say yes to the ethical brands
What is a ‘yay’ and what is a ‘nay’ for Aardae is another task altogether, says Shweta when asked about how they choose brands before bringing them on board. “We have a checklist and have clearly laid out what a conscious brand means.” This checklist involves six factors—safety & certifications, sourcing, sustainability, transparency, efficacy and brand positioning.
She then explains the checklist, saying, “We make sure that the products are safe for the consumers and the environment by themselves and when they are used in a beauty product, they should be cruelty free, dermatologically tested and sensitive skin safe. Next, we see the source. Meaning, we make sure that the ingredients are sourced ethically and naturally or are a combination of synthetic and naturally derived. Anything other than that is a no for Aardae. We also check for sustainability in terms of packaging. We take products that are entirely transparent around ingredient sourcing, purity and composition. We check for their efficacy and see whether these products address the respective claims and concerns raised by us. Lastly, we take a brand on board if their philosophy matches with our own.”
According to the duo, there are numerous Indian brands which are making a mark as clean products. They are also acquiring the highest standards of certifications like COSMOS, ECOCERT, Australian Certified Made Safe, etc. These brands have created an impact globally due to their supreme quality ingredients, the innovations in their formulations, by being transparent about their ingredients and by opting for sustainable packaging. Hence, they are fit for their platform.
This gives them a competitive advantage over other brands. In Singapore for example, Sephora, a well-known brand, has a clean vertical but has yet to define it or its philosophy. Therefore, both founders claim that Aardae does not have a direct competitor because it is a pioneer in the clean beauty space.
Next on their to-do list
So far Aardae is a bootstrapped start-up. But after the launch of their platform, the founders are looking for investments to do more.
Darshana tells us, “We have been through the friends and family route for funding, and they have been so supportive and believed in our vision. Now we are looking to go through a pre series in the future.”
With this funding, their intent is to expand their company’s footprint in the ASEAN countries such as Malaysia and Indonesia and also in the GCC countries by 2023. Going forward, Aardae’s road map is quite independent, says Darshana. “As we are planning to launch in different countries. And so, Aaarde’s performance in one country will not affect the other,” she concludes.
