When people discuss holographic eyeliner or gradient/ombre lips, many may wonder if science fiction has entered the makeup industry. For a long time, K-beauty, especially Korean skincare, has been popular worldwide for its innovative product lines. But these days a wide range of beauty products are emerging and Indian consumers are also a part of that change.
People are willing to spend a little more for vegan and cruelty-free products while seeking products that meet global standards. This has opened doors for new-age beauty and personal care (BPC) companies that are trying to balance consumer demands with relatively affordable prices.
Amit and Mohit Goyal are brothers who have long been associated with the general and modern trade in the cosmetics industry. In 2013, they left their previous business and launched a brand called Swiss Beauty. Offering convenient, high-performance tinted cosmetics and skincare.
Although inspired by Swiss beauty standards from the start, that's not what the name suggests. The brand has developed diverse palettes keeping in mind the different skin tones found across India to complement the unique features. According to the brand, the company claims to be vegan, cruelty-free and free from parabens and alcohol. All of its products are dermatologically tested, FDA-approved and PETA-certified.
At a time when D2C (direct-to-consumer) and digital-first models are emerging, Swiss Beauty has taken the bold step of opting for offline sales to reach a large audience accustomed to buying products through traditional retail. This strategy played a crucial role in increasing its presence across India.
It made a strategic online push in 2019, aligning well with the e-commerce boom. Today, it has an omnichannel presence with its own website, beauty-focused marketplaces like Nykaa and Purplele, and over 25,000 physical touch points across 550+ cities, including Tier II and III locations.
To eliminate warehousing issues, the brand partnered with 3PL provider Emisa in 2022. This partnership has ensured a strong presence across various channels, a critical component of a true omnichannel brand, and has helped manage volatility.
While scaling, the brand added more than 1.5K SKUs including face and eye makeup, lip colors and more. It also offers an extensive skin care range and was launched as an energetic line aimed at the youth.
Unlike its peers, Swiss Beauty is still bootstrapped and has no immediate plans to raise funds. Although it did not disclose financials, it claims 100% annual revenue growth in FY2024. The company will launch new collections and enter new markets to emerge as an INR 1K Cr brand in the next two to three years.
R&D for quality and innovative product lines
When launching their venture, the brothers leveraged their expertise to focus on three key areas to grow the brand.
Experienced in brand launching and positioning, Amit took charge of general merchandise markets, while Mohit was in charge of supply chain and operations for new product development. They also appointed Sahil Nair as the CEO of the company to ensure smooth running of the business.
Swiss Beauty has an in-house R&D team that benchmarks new products against industry-leading products and finalizes third-party manufacturers on production procedures and quality parameters that align well with the brand.
To maintain the promise of 'quality', a variety of ingredients are imported from Japan, Italy, Germany and Taiwan (ROC). All raw materials are quality checked as per the guidelines set by Bureau of Indian Standards (BIS). They undergo several tests to enhance product safety for heavy metals, pH factor, odor, viscosity and consistency. In addition, it distributes directly to retailers and marketplaces, cutting out middlemen and further preventing margin dilution.
How Swiss Beauty Uses Omnichannel Smartly
Swiss Beauty is present in metros and Tier I cities like Delhi, Kolkata, Chennai, Bengaluru and Mumbai; They have a presence in Tier II cities like Jaipur and Indore (top performers in this segment) and Tier III locations like Bareilly and Nellore. The brand has its retail footprint in 500+ cities across the range.
Today, Swiss Beauty has easy access to comprehensive customer data and feedback collected from GT, MT, GT-BA, marketplaces, D2C website, social media channels and customer support. All of these provide critical inputs for requirement-gap analyzes via analytics tools, and the new product development team works on diverse requirements.
For the record, 55% of the brand's revenue comes from offline stores, 40% from online marketplaces and 5% from the website. Its Tier I and II markets account for 80% (40% each) of its sales, while Tier III locations are fast-growing at 20%.
The inclusive approach has its challenges, however. “Think of a product launch that needs to happen across all channels simultaneously. Our distribution timelines need to be in sync, but getting to 25K physical counters can be very different from launching a product on multiple e-commerce platforms. Marketing for a diverse region is also difficult because the requirements are different,” added Nair.
However, Swiss Beauty's strong offline footprint has helped it grow its digital presence, and those who order online appreciate the ease of access. Growing demand for premium products, effective customer retention and positive product reviews have boosted sales in key markets. Many of its products also earn bestseller badges. The startup is catering to the growing sales demand with the help of its 3PL partner Emisa.
3PL Edge of Swiss Beauty
In the world of e-commerce, shoppers look for fast and efficient delivery, and brands that fail to do so are losing customers. Sensing the need for faster deliveries, Swiss Beauty outsourced order fulfillment to Emisa, a 3PL player that specializes in e-commerce inventory management and works with several other new brands such as Snitch, The Sold Store and MamaEarth.
Swiss Beauty says Emisa helps demand surges with a week's notice. A 3PL partner can handle 5x its regular supply volume while maintaining service-level agreements. Emisa has state-of-the-art fulfillment centers for multiple brands and can reallocate space and resources to meet large demand spikes.
"The partnership has been mutually rewarding. "Swiss Beauty is a great organization with a strong work ethic and deep business understanding. We are its key fulfillment partner and look forward to growing with the company as it expands its fulfillment network across the country," says Ajay Rao, Founder-CEO, Emisa.
Indian BPC market to reach $30 billion; Will homegrown startups thrive?
Swiss Beauty has plans to expand both offline and online to emerge as a market leader. However, as 55% of its revenue comes from the offline market, it is investing heavily in offline growth. Currently focusing on modern merchandising and setting up more kiosks to ensure deeper market penetration and increase sales and brand awareness.
The brand aims to increase its general merchandise touch points from 25K to 30K in the next 12 months by expanding to Tier II locations and Smart Cities. It also plans to double its number of Exclusive Brand Outlets (EBOs) to 24 across 12 Indian cities and open 147 BA assisted outlets.
Setting up in-house R&D, manufacturing and QC labs is critical if homegrown startups and D2C brands are to compete with industry giants such as Hindustan Unilever (owner of Lakme), L'Oreal Paris, Pat McGrath Labs and MAC.
Industry experts believe that there will be enough room for home-grown disruptions to come up with innovative product lines to satisfy the global audience.
The beauty and personal care market is expected to grow from $5 billion in 2023 to $28 billion in 2030, at a CAGR of 28%.
India has an opportunity to be at the forefront of this segment given its knowledge of Ayurveda and the world of plants. Also, the homegrown beauty market already has two unicorns listed – Mamaearth and Nykaa – indicating growing interest from consumers and investors. Given this context, it's time for a new breed of agile and adaptable companies like Swiss Beauty to capture the consumer-dominated beauty market that has evolved with the help of 3PL partners like Emiza.
