Had we ever thought what heights can our kids take us to? Well they do help us grow with their growth.
However, meet Mamaearth, which grew stronger by building products for their kids, making it one of the most powerful organic products for all age groups.
Mamaearth is a natural and eco-friendly skincare company that has been making headlines since it was founded in 2016.
The company has raised a total of $103 million from investors, and its products are sold through a number of third-party retailers, both online and offline.
In just four short years, Mamaearth has sold over 1 million products and has a strong online presence.
The company uses natural ingredients and a direct-to-consumer approach to reach its customers. This blog will take a closer look at the Mamaearth business model, including how the company makes money and its plans for future growth.
We'll also touch on the recent news of the company filing for an IPO and its current valuation.
Looking to the future, Mamaearth is poised for continued success as it expands its reach and product offerings.
Ghazal and Varun Alagh found Mamaearth in 2016 while looking for natural, toxic-free baby products online for their child. The company is headquartered in Gurugram, India. Mamaearth's mission is to provide natural and Ayurvedic products for infants, kids, and mothers. This is the first Indian skin care company whose products are certified by Made Safe.
Talking about MamaEarth , Ghazal Alagh and her husband, Varun Alagh opted to address the underlying cause of their son's skin problems after being unable to locate any natural remedies.
They learned that many of the toxins utilised in India are prohibited outside of the country due to their damaging effects on a baby's skin. After enquiring among their relatives and friends, they found out that this is a struggle which most of the new parents face.
The duo decided to take action and founded Mamaearth in 2016. Together with a few angel investors, they started the company with an investment of 90 Lakhs. The primary objective of Alagh was to provide safe, natural products for the newborns.
The business initially offered six different goods: creams, lotions, shampoos, body washes, oils, and diapers. Currently, Mamaearth sells more than 100 items.
The Founders of Mamaearth
Ghazal Alagh is the co-founder and CEO of Mamaearth. She is responsible for the company's strategic vision and growth. She is known for being one of the judges in “Shark Tank India”, a business reality show that went live in 2021.
She has a bachelor’s degree in Information Technology and have done an Intensive Courses in Modern Art, Design and Applied Arts from New York Academy of Arts. Ghazal began her work with NIIT as a corporate trainer.
As part of her responsibilities, she coached managers and engineers from several IT firms in SQL, J2ME, and Oracle.
Varun Alagh is the co-founder and COO of Mamaearth. He is responsible for the day-to-day operations of the company. He has a degree in engineering from Delhi College of Engineering and an MBA from Indian Institute of Management, Calcutta.
He has several years of experience in the business and marketing sectors before he co-founded Mamaearth.
Mamaearth has a partnership with Save the Children, an international NGO that works to improve the lives of children around the world.
This partnership allows Mamaearth to give back to the community and helps them achieve their mission of providing natural and Ayurvedic products for infants, kids, and mothers.
Growth Story of Mamaearth
Since its inception, Mamaearth has won numerous awards which involves, “One of the Best Brands” in ET Brand Festival in 2019.
The company has also been featured in prestigious publications such as Forbes India, YourStory and Entrepreneur. In 2018, Mamaearth raised $1 million in Series A funding from Fireside Ventures.
This funding allowed the company to expand its product range and reach more customers.
Mamaearth is well-positioned for long-term success due to its strong online presence, growing customer base, and innovative product range.
The company's partnership with Save the Children gives it a competitive advantage in terms of social responsibility. With its recent funding injection, Mamaearth is primed to make a significant impact in the natural and Ayurvedic product markets.
The six-year-old business uses social media and influencer marketing primarily to promote its product lines through digital marketing channels.
As a result, its marketing expenses, which accounted for 44.1% of total expenses in FY21, were the largest cost centre. From Rs 49.2 core in FY20 to Rs 192.23 crore in FY21, their costs more than doubled.
Because of the rise in demand, Mamaearth's raw material expenditure increased 3.5X to Rs 133.1 crore in FY21 from Rs 38.3 crore in FY20.
In accordance with the overall scale, transportation and secondary packaging costs increased as well, jumping 4.2X to Rs 62.7 crore in FY21 from Rs 15.02 crore in the prior year.
After posting losses of Rs. 1,332 crore in FY21 and Rs. 428 crore in FY20, the company turned a profit in FY22 with a net profit of Rs. 14 crore. Its net profit for the first six months of FY23 was Rs3.67 crore.
Mamaearth Business Model: How the Company Works
Mamaearth is a direct-to-consumer brand that sells baby care and personal care products. Their business model is centered around offering natural and toxin-free products through their online platform and their own physical stores.
They source their raw materials and manufacture their products in-house, which allows them to control the quality and price of their offerings.
By leveraging the power of e-commerce, they are able to reach a large customer base and offer their products at a competitive price point.
Additionally, they use various digital marketing tactics, influencer partnerships, and customer reviews to build brand awareness and drive sales.
The company has a partnership with Save the Children, which allows it to give back to the community and achieve its mission of providing natural and Ayurvedic products for infants, kids, and mothers.
What sets Mamaearth business model apart:
- Connectivity with the Intended Audience
Although there are many successful companies across the world, However, very few of them have a unique business model/plan. Most of them adhere to a similar business strategy and depend on the expansion of their brands.
However, what sets Mamaearth's business model apart from others is its capacity to engage with and win the trust of the customer base for its product.
Gaining the trust of your target market is the most crucial thing for any brand. Mamaearth executed this to perfection. They produced commercials specifically for mothers and targeted them from the beginning.
They developed a website where mothers can communicate and share their experiences with lactation, parenting, and working mothers lifestyle.
This helped Mamaearth gain a positive reputation among mothers, who later turned into committed customers after using the MamaEarth products.
2. High Quality Products
Making items that are both safe to use and safe for the environment is a goal of Mamaearth. They support providing premium goods at competitive prices.
Their products are safe for the environment and children because they only contain natural and organic ingredients.
By doing this, they may reduce waste while also saving money on basic materials.
Additionally, they have introduced baby wipes made of bamboo, kids' toothpaste made entirely of natural plants, and skin- and hair-care items with organic ingredients including onion, CoCo, and charcoal.
The baby wipes are absolutely safe for your child's skin because they include no chemicals or coloring.
People recommend Mamaearth products to others. For their business, word-of-mouth advertising has been quite effective.
The business offers product discounts to entice new customers and retain old ones. Additionally, they have a loyalty programme where clients can get points for buying their goods. Points can be redeemed for gift cards or cash back.
3. Lean Innovation Cycle
MamaEarth was able to quickly identify and satisfy their customers' needs, thanks to the lean innovation.
By gathering client feedback frequently and early in the product development cycle, lean innovation seeks to maximise efficiency while reducing waste.
Lean innovation was utilised by Mamaearth to better comprehend and serve its consumers' needs.
They used experimentation to discover new product ideas and enhance the quality of their existing ones. By using this tactic, they were able to immediately fulfil their customer needs.
Mamaearth is well-positioned for long-term success due to its strong online presence, growing customer base, innovative product range, and commitment to sustainability.
How does Mamaearth Earn Money?
Mamaearth earns money through product sales, subscription fees, and advertisements. The company offers a wide range of products, making it easy for customers to find what they need.
The subscription-based business model allows customers to access all of the company's products for a monthly fee. Mamaearth also generates revenue through advertisements on its website and social media platforms.
Mamaearth offers a subscription-based business model that allows customers to access all of the company's products for a monthly fee.
This pricing model is convenient for customers who want to use Mamaearth's products on a regular basis. The subscription model also provides recurring revenue for the company, which is important for long-term success.
Mamaearth generates revenue through advertisements on its website and social media platforms. The company uses digital marketing techniques to reach its target audience.
Mamaearth is well-positioned for long-term success due to its strong online presence, growing customer base, and innovative product range.
Mamaearth Marketing Strategy
Alagh's created the Honasa Consumer brand Mamaearth with the intention of offering suitable items for a baby's sensitive skin.
But then the pandemic struck. Mamaearth, which now also produced personal care products, managed to grow at a 400% pace when other FMCG companies were suffering the worst effects of the lockout.
Let's examine the marketing tactics the brand used to get where it is today.
- Brand Tagline
The company sold common household items that were safe for both adults and children to use. And therefore, it was crucial to deliver a message to them in order to build trust and recall value.
Their simple tagline is "Goodness Inside." People were better able to comprehend the types of goods that the brand produced and stood behind.
2. Mix of Digital and Traditional Marketing
Mamaearth's marketing strategy is based on a mix of digital and traditional marketing channels.
Some of their digital marketing channels include Google Ads and SEO. Mamaearth has also been featured in many popular magazines and websites, such as Vogue, Elle, and Forbes. The company has also won many awards, which helps increase their brand awareness.
Mamaearth's marketing strategy is effective because it reaches its target audience through multiple channels. The company's website is optimized for search engines, which helps potential customers find the site when they are searching for products that Mamaearth offers.
In addition, Mamaearth has a strong social media presence and is active on platforms such as Twitter, Facebook, and Instagram.
The company regularly posts content that is relevant to its target audience, which helps to keep them engaged with the brand.
Mamaearth's growing customer base is one of the key factors that contribute to the company's success. The company has a strong online presence and uses digital marketing techniques to reach its target audience.
3. Engaging Content on Social Media Platforms
Mamaearth's social media strategy focuses on creating engaging content that educates parents about the importance of using natural products for their children.
They established programmes like "Plant goodness," which involves planting a tree for every order, and "Plastic Positivity," which focuses on plastic recycling, because they were a chemical- and toxin-free company. This aided in developing their reputation as an eco-friendly brand.
Mamaearth had a solid online presence by the time the lockdown was implemented, in contrast to many other firms that were still dealing with the effects of closing their physical stores and a poor online presence.
They gained the upper hand as a result, and the brand was able to draw in new clients. Even yet, the business expanded its outlets and now has 10,000 locations across the nation.
Additionally, throughout the pandemic, emphasis was placed on items like facewashes and serums made with turmeric and vitamin C.
4. Collaboration With the Influencers
Additionally, collaborations with mom bloggers and influencers contributed to the brand's perception as a sought-after one.
Influencer marketing has increased the brand's overall worth.
5. Brand Endorsement Through Actors
In order to promote fitness and health, the company chose actress Shilpa Shetty as their Brand Ambassador. But in 2021 Sara Ali Khan was chosen to be the brand ambassador, giving it a more contemporary vibe.
The company had launched an Integrated marketing campaign with actor Shilpa Shetty Kundra, #IssWinterGlowNaturally.
She promotes Mamaearth honey malai as a simpler method of giving one's skin the hydration and nourishment it needs during the winter. The movie is a straightforward but effective illustration of the brand's ideology and its goodness-inside-me commitment.
6. YouTube Advertisements
For marketing purposes, online adverts are another choice for businesses because they are easy to put up, affordable, and provide a way to simultaneously reach a lot of people.
Depending on your budget and the goals of your campaign, you can also choose the kind of advertisement you want to run.
Without a doubt, YouTube has developed into one of the most effective platforms for building brand awareness.
More than half of people would rather watch YouTube reviews than read about products. Brands want to utilise the site to its best potential because of this.
7. TV Commercial
The structure of television advertising is seen as traditional and somewhat out-of-date. Therefore, the firm did not at first support the notion of advertising the brand through TV ads.
They wanted to do something novel, but since TV has a tendency to sway viewers, they also chose to dabble with television advertising.
Mamearth makes the most of digital marketing channels. The main goals of Mamaearth's digital strategy are to attract a large audience, establish a memorable brand identity, understand what customers want, and maintain relationships with them.
Mamaearth mostly uses the internet for advertising. To increase their customer base, they have embraced digital advertising successfully. Their commercials are extremely memorable and effectively portray their brands.
Mamaearth Funding and Valuation
Mamaearth has raised a total of $126M in funding over 8 rounds, with their latest being a Angel round in Sept 2022. Mamaearth is backed by 10 investors and has a post-money valuation of $1.2B as of Sept 22.
Mamaearth's first round of funding was a $125M seed round in 2016 and $1M Venture round in 2017 from Fireside Ventures.
This was followed by a $4M Series A round in 2018 from Fireside and Stelaris Venture partners. In 2020, Mamaearth raised a $17M Series B round and 37.5M in series D round, Dec 2021 from Sequoia India.
The company's most recent funding was a $758K Angel round led by Shilpa Shetty Kundra in Sept 2022.
With its latest round of funding, Mamaearth has achieved unicorn status, meaning that it is now worth over $1B. This makes it one of the few Indian startups to reach this milestone. Mamaearth plans to use its new funding to expand its product range and reach more customers.
The company is well-positioned for long-term success due to its strong online presence, growing customer base, and innovative product range.
How Mamaearth is Dominating its Competitors
Mamaearth has been able to dominate its competitors by offering natural and Ayurvedic products, as well as its focus on quality and safety.
Additionally, the section will touch on the company's efficient manufacturing process and supply chain.
MNCs like Himalaya and Johnson & Johnson, as well as e-commerce sites like Nykaa, provide Mamaearth with significant direct and indirect rivalry. Contrarily, organised companies like Johnson & Johnson, Kimberly Clark, Procter & Gamble, and Unilever, which compete with Mamaearth, dominate the cosmetics sector.
Additionally, as more and more businesses emerge nowadays with the toxin-free philosophy, Mamaearth faces greater competition in general.
Mamaearth's products are made from natural and organic ingredients, which sets it apart from its competitors.
The company is also focused on quality and safety, making sure that all of its products meet rigorous standards. In addition, Mamaearth has an efficient manufacturing process and supply chain, which allows it to keep costs low and pass on savings to its customers.
Looking to the future, Mamaearth plans to continue expanding its product range and reach more customers. The company is well-positioned for long-term success due to its strong online presence, growing customer base, and innovative product range.
Mamaearth News on Filing IPO
The mamaearth team has been very secretive about their plans to file for an IPO. Some people in the industry are skeptical about the company's inflated valuation.
In this section, we will take a look at mamaearth's plans to file for an IPO and whether or not the company is worth its estimated $1 billion valuation.
Mamaearth has not yet announced when they plan to file for an IPO, but it is widely expected that they will do so sometime in 2022.
The company's current valuation stands at $1 billion, which is significantly higher than other companies in the same space. Some people in the industry believe that Mamaearth is overvalued and that their IPO will not be successful.
Only time will tell if Mamaearth's IPO is successful. However, the company is well-positioned for long-term success due to its strong online presence, growing customer base, and innovative product range.
Conclusion: The Way Ahead
The mamaearth business model is strong and the company is poised for long-term success. The company has a great product lineup, a solid customer base, and is constantly innovating. Additionally, Mamaearth is well-funded and has a bright future ahead.
The company's efficient manufacturing process and supply chain allow it to keep costs low and pass on savings to its customers.
Additionally, mamaearth's focus on quality and safety sets it apart from its competitors. Looking to the future, mamaearth plans to continue expanding its product range and reach more customers.