A mother always cares the most about using a product for her child. But in 2016, a husband-wife duo, Ghazal Alagh and Varun Alagh founded Mamaearth—an Indian personal care brand specializing in toxin-free products for new mothers and babies.
Mamaearth creates products with all-natural ingredients free from harmful chemicals like parabens, silicones, mineral oils, and SLS. They even use plant-based preservatives and essential oils to ensure gentle formulations on a baby’s skin.
Mamaearth’s business model follows a DTC (direct-to-consumer), selling their products directly to consumers through their website and online platforms like Amazon, Flipkart, and Nykaa. This enables them to cut out middlemen and offer affordable yet high-quality products.
Mamaearth owners started this company with just 3 products- a face wash, a shampoo, and a body lotion. Today, it has over 100 toxin-free products across categories like skincare, haircare, babycare and bath & body, with a net worth of Rs 148 crore.
Mamaearth’s Business Model: Overview
In this blog, we will learn everything about Mamaearth’s strategy and how their safe, natural, and budget-friendly products are now the favorite of all moms. Not just this, but you will also know how this successful company is doing the funding and marketing to become the best.
All About Mamaearth:
Mamaearth is an Indian startup making natural and toxin-free skincare products for moms and children using ingredients like plant-based squalane, organic aloe vera, and shea butter. The founders Varun Alagh and Ghazal Alagh started this in 2016 with an investment of around INR 90 lakh.
What sets them apart is their commitment to using organic products in everyday skincare routines. They were one of the first brands to use non-toxic seals for their cosmetics, making them a game-changer for all cosmetic and skincare needs.
They have a range of products for new mothers, like body lotions, face serums, shampoos and conditioners. They also have a baby care range with products like baby massage oil, shampoos, wipes and diapers.
All products are manufactured in India at Mamaearth’s factories, ensuring end-to-end quality control. At the same time, the website allows them to interact with customers and get feedback for product improvements directly.
Competing directly with big old brands like Johnson and Johnson and Himalaya, Mamaearth now has over 1.5 million customers devoted to its product and brand.
Target Audience Of Mamaearth:
This brand is about caring for babies and their skin, so they’ve broadened their appeal from just new moms to millennials. With their chemical-free products like lotions, serums, creams, and face wash, they’ve caught the attention of buyers who care about what they put on their skin and hair. That’s why folks keep returning for more – they love the feel and quality of the brand’s products.
At first, Mamaearth focused on products for new moms and their little ones by offering a wide range of products such as baby care, pregnancy care, and skin and hair care products. Additionally, Mamaearth also sold accessories, toys, and apparel. But recently, they’ve broadened their appeal by reaching the millennial generation with chemical-free products like hair oils, lotions, creams, serums, and face wash.
Mamaearth Marketing Strategy:
From digital campaigns to influencer marketing, Mamaearth’s owners successfully created brand recognition and drove sales growth. This effective marketing strategy has helped position Mamaearth as a trusted brand for natural baby and mom care products.
The big boost to the brand’s success was after signing Bollywood celebrities like Shilpa Shetty, Sara Ali Khan, And Samantha Prabhu as brand ambassadors. Their endorsements have helped raise credibility and visibility by emotionally connecting Mamaearth products with customers. Anushka Sharma promotes Mamaearth’s baby care range, while Shilpa endorses skin and hair care products.
Mamaearth relies heavily on digital advertising to reach its target audience of millennial parents. The company frequently runs ad campaigns on social media platforms like Facebook, Instagram and YouTube. They create customized video ads highlighting their products’ natural and toxin-free ingredients by targeting new parents and pregnant women.
How Does Mamaearth Earn Money?
From ads on their website to social pages, Mamaearth reaches their ideal clients using digital marketing. With a diverse range of goods, Mamaearth makes it simple for customers to find exactly what they want.
Customers who repeatedly use Mamaearth’s products benefit from the subscription model, which offers access to everything for a fixed monthly price. Plus, Mamaearth can rely on consistent income with this pricing setup, ensuring they continue thriving down the line.
In 2022, their operating revenue was 9.4 billion Indian rupees, up from the previous year. Skincare and haircare items are responsible for 80% of their revenue, while baby products only contribute 20%. Besides, Mamaearth has a great gross margin profile of over 65% when it comes to personal care, because of which they offer around 40-50% of their earnings into marketing efforts. The brand also has received funding from investors like Sequoia India, Fireside Ventures and Switzerland-based private investment group Artha Venture Fund.
It competes against companies like Emami Limited, Johnson & Johnson, and Bey Bee, with a diverse line of personal care items (like shampoo, soap, lotion, and body wash). You may need to learn that they also offer household items like cleaning supplies, laundry detergent, and kitchenware!
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Mamaearth Funding And Valuation:
Mamaearth has obtained $111.6 million through eight funding rounds. Their most recent investment was obtained from a Venture – Series Unknown round on September 15, 2022, attracting the attention of 10 investors, notably including Shilpa Shetty, Sequoia Capital India, Evolvence India Fund, and many more.
The funding rounds of Mamaearth have been led by notable investors such as Sequoia Capital India, Sofina, Fireside Ventures, and Stellaris Venture Partners. The company has also acquired four organizations, including Dr Sheth’s for Indian Skin, for a sum of ₹280 million. Mamaearth plans to utilize the raised funds to bolster its product offerings, strengthen its presence in the Indian market, and explore international markets.
Mamaearth will use the new funds to expand its product range, strengthen its technology and data science capabilities, increase brand awareness and accelerate growth. Mamaearth aims to become a complete lifestyle brand for mothers and babies in India.
They see a large potential market for toxin-free products in India and want Mamaearth to be the most trusted brand.
How Is Mamaearth Dominating Its Competitors?
1. Natural And Toxin-Free Ingredients:
Their products are made with natural ingredients like aloe vera, coconut oil, tea tree oil etc. They are free from parabens, silicones, SLS, and other harmful chemicals, making their products safer and more effective for consumers who prefer natural ingredients.
2. Variety Of Products:
They offer over 100 products for newborns, babies, kids, and adults, including shampoos, body lotions, face washes, oils, diapers, wipes, and more. This large product portfolio helps them cater to all age groups and needs.
3. Strong Branding And Marketing:
Through TV ads done by Bollywood actresses and emotional mother-baby ads, they have created an emotional connection with their consumers. Their marketing campaigns, social media presence and celebrity endorsements have quickly helped them build a strong brand identity.
4. Affordable Prices:
Despite using premium natural ingredients, they keep their product prices reasonable and competitive compared to other natural brands. This makes their products accessible to a wider set of customers.
5. New And Innovative Products:
They constantly upgrade their existing products and introduce new variants to meet the changing needs of consumers. This helps them stay relevant and ahead of the competition.
What Is Unique About The Business Model Of Mamaearth?
By now, we know how Mamaearth owners, with their top business model, were able to reach a wide number of customers in one go. Here are some of the key things that make Mamaearth stand out.
Superior Quality Product:
Mamaearth relentlessly focuses on providing 100% natural, safe, high-quality products for babies and moms. They strictly avoid using harmful chemicals like parabens, silicones, SLS, mineral oil, and more in their products. All products undergo rigorous testing at multiple stages to meet high-quality standards. Focusing on superior natural ingredients and formulations has helped Mamaearth build customer trust.
Lean Innovation Cycle:
Mamaearth follows a very lean innovation cycle where they quickly identify gaps in the market, develop a prototype, test it with customers, and then scale up and launch the product. This allows them to constantly innovate and launch new, unique products that meet their target customers’ evolving needs.
They have launched over 200 natural products in just 6 years of operation, which shows the speed of their product innovation. This lean innovation model also helps them respond quickly to customer feedback and make changes to existing products.
This unique combination of 100% natural and high-quality products and a rapid innovation cycle has helped them scale and grow quickly, establishing them as a leader in India’s natural baby and mom care segment. Their focus on quality, innovation and customer-centricity sets them apart from other e-commerce companies.
Are you feeling inspired by the triumph of a locally-made brand? Thinking of creating your own success tale in the foreseeable future? After knowing everything about Mamaearth’s business model and current net worth mamaearth, we are sure about these points.
- Their strong brand strategy of providing toxin and chemical-free skincare products made the brand stand out from some big and old skin care product companies like Himalayas.
- Consistency and marketing are key to connecting with your present and potential customers. Mamaearth’s hardcore marketing strategy made them successful in very less time.
Not just this, but Mamaearth has big plans for the future and aims to take its business to the next level by planning to have a $3 billion valuation for its IPO in 2023.
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CA Rahul Malodia is the founder and CEO of Malodia Business Coaching Pvt. Ltd. He is a Business Coach, Mentor & Investor. He has trained over 25,000+ Businessmen across India.