Apr 3, 2023
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Vineeta Singh of Sugar Cosmetics on evolution of her brand, profitability and valuations

Apr 3, 2023

When Sugar Cosmetics co-founder Vineeta Singh started the direct-to-consumer business with her husband Kaushik Mukherjee in 2014, the two set out to do things in a little disruptively innovative way.  Based on the insights of its beauty subscription service, the two created a cosmetic brand suited for the Indian masses to classes that has managed to stay on top in an industry that’s so saturated for almost a decade.
The brand is nearing unicorn status with an estimated valuation of more than half a billion and with a retail footprint of over 45,000 retail outlets, the onboarding of actor Ranveer Singh as an investor, inroads in global markets, the wife-husband duo continues to scale Sugar aggressively to make it one of the largest beauty brands in the world.
FashionNetwork.com spoke to Vineeta Singh, co-founder and CEO of Sugar Cosmetics on what makes Sugar click, why the brand is such a success, working with celebrities, expansion, profitability, and more.

Vineeta Singh of SUGAR Cosmetics on evolution of her brand, profitability and valuations - Vineeta Singh

FashionNetwork.com: Sugar Cosmetics has managed to make significant inroads in the Indian beauty market with its private labels. Can you talk us through the journey so far?
Vineeta Singh: The Indian beauty industry back in 2014 had its own constraints of being dominated by the multinational brands, very few of whom had a range suited for the Indian climate and complexion. At that time, we were running a beauty subscription service that gave us insight into this white space in the industry. With this direct feedback from the 100,000 women who were users of the subscription, we launched Sugar Cosmetics. For our growth, our focus has always been on what we do best: to listen to the customer, to keep innovating on product end, and to be obstinately clear about not taking shortcuts that grow sales at the expense of the brand. Our plans for 2023 include targeting and achieving a 100% Y-O-Y revenue growth over last year, expansion to more than 60,000 retail outlets, and growing our team size to 3,000 employees. Additionally, with our recent onboarding of Ranveer Singh as an investor, we look forward to further cementing our position as a fan favorite and creating new pathways for customer acquisition, especially with the Gen Z and Millennial audiences in India.

FNW: The Indian beauty market is expected to reach $21 billion by 2025. This strong and continuous growth has attracted the covetousness of global players in the cosmetics sector. However, very few homegrown brands have managed to tap the full potential of this market. How did Sugar manage to crack the market in a short span of time?
VS: Sugar Cosmetics was born from a desire to bridge the gap between providing world- class quality of colour cosmetics and makeup pigments that suit Indian skin tones and climate. It was not just about selling colour cosmetics but building a distinct individuality for the brand. We imagined building the makeup of choice for bold, independent women, who refuse to be stereotyped into roles. Keeping this in mind, we wanted to create a brand that has the Indian ethos yet provides the impact one would expect out of a global brand. With a clear commitment towards building quality products, our obsession of crafting the perfect match for every Indian skin tone across seasons and around the calendar, and providing exactly what the customer wants (trendy, richly pigmented, high colour payoff and long-lasting products) has been the recipe for finding such a strong acceptance in the market in such a short while pegging us ahead of some of the global brands.
FNW: What is the expansion plan for the brand in India and abroad? Which markets are you looking to tap next for growth?
VS: The team is relentlessly building both digital and retail distribution to further our reach in existing and new geographies. The retail footprint is also expected to grow from the current 45,000+ retail outlets across 550+ cities to 100,000+ touchpoints by 2023 and are in line to double the company’s revenue by the next financial year. We will also be collaborating with like-minded personalities, events, IPs across newer media and enhance the retail marketing and visual merchandising experience, explore newer product lines while enhancing our existing ones.

Vineeta Singh & Kaushik Mukherjee - SUGAR Cosmetics

FNW: Even though many Indian brands manage to receive infusions of capital funds from global players, what do you think it takes for domestic brands to achieve a global foothold and what is Sugar’s plan for global markets?
VS: As the global market matures both from a demand and supply perspective, Indian brands that set shop globally are working on a detailed roadmap for the market. From introducing localized content to sell their products or services to amplifying mergers and acquisitions – the focus on achieving global foothold is stronger than ever. While setting foot in the global market, it is crucial to find clear synergy with the demand in different countries and accordingly launch a certain product in a market. A great example of this would be Sugar Cosmetics’ eye products like mascaras faring well in the Russian market, while our face makeup products sell a lot in the Dubai market. Similarly, some 60% of Sugar Cosmetics’ business comes from markets outside Tier I cities in India while the share of international markets (which includes the Middle East, US, and Nepal), stands at about 10%. While in Russia we’re currently available in 100+ stores, in Dubai we’re available in 28+ stores, and are also available in the U.S. markets, and Nepal. We are closely studying the new trends internationally and focusing on launching new products, merchandise, and regional wise digital content, to strengthen Sugar’s wide-ranging portfolio and reach.
FNW: Sugar Cosmetics is one of the few brands that achieved success without celebrity endorsements. However recently, some celebrities like Ranveer Singh and Tamannaah Bhatia have been signed to endorse the brand. What impact has it had on the brand?
VS: Our partnership with these actors is a step further in cementing Sugar’s position as a fan favourite and creating new pathways for customer acquisition, especially with the Gen Z and Millennial audiences in India. The partnership has served as an extra boost in our growth trajectory as we continue scaling Sugar aggressively to build it into a large and much-loved makeup and beauty brand. Our high retention of customers is a testament of onboarding Ranveer that helped us build a brand connect across key markets. Thus, creating new pathways for great customer acquisition.
FNW: Unlike the west, the concept of celebrity brands is relatively new to India. However, recently we have seen many companies partnering with top celebrities to co-create, high-impact homegrown brands. What is your take on this trend and does Sugar have any plans of launching celebs brands?
VS: Now, we are focused on building our own brand, Sugar Cosmetics. We strongly feel that our consumers are our celebrities. We want to co-create with them keeping in mind their needs, their outlook and how they want to pick and choose their makeup favourites each day. While we lay out our plans for the coming year and new onboardings, our focus right now is to ensure maximum visibility for the brand by engaging with influencers to across regional, macro, and micro to create content, viral makeup hacks, and educational dos and don’ts that contributed to Sugar’s success.

SUGAR Cosmetics

FNW: Sugar Cosmetics is gearing up to launch its initial public offering by 2025 and plans aggressive expansion with an eye on profitability. By when you think the company will achieve profitability given the fact that the company has witnessed strong revenue growth over the years despite widening of losses.
VS: We've not set a timeline for launching our initial public offering, but it is likely that we will build towards it over the next three years. We're in a phase of rapid growth where we see momentum to garner market share from market leaders. However, competing with them and their marketing spend on a lesser topline sometimes impacts profitability in the short term. Over the last year, we have improved our profitability by 15%, and we see this trend continuing to help the company become profitable in the upcoming fiscal year.
FNW: Recently, several IPOs have not been able to sustain their high valuations. What is your take on high valuations and how to put the apprehensions regarding valuation concerns among investors to rest given the fact that Sugar will be listed soon?
VS: While I won't be able to comment on the valuations of some of the very well-respected brands you've mentioned, I think valuation lies in the eyes of the beholder. This is why companies command very different revenue and EBITDA multiples in private and public markets. The usual narrative for succeeding in public markets requires younger venture-funded companies to balance their growth and profitability ambitions and I am very confident that such companies will make that journey and continue to delight both their customers and shareholders.

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