Not everything about brand building involves sales: SUGAR Cosmetics’ Kaushik Mukherjee

In an interview at Startup Brands Summit, the founder and COO of SUGAR Cosmetics says that they want to become India’s largest colour cosmetics brand in the next three years.

To become the most powerful challenger brand in the cosmetics space in just seven years, comes with some hard-earned lessons. All aspiring entrepreneurs can learn from SUGAR Cosmetics’ journey of building a brand that is targeting Rs 550 crore-plus in revenues during the current fiscal.

The founder and COO of SUGAR Cosmetics, Kaushik Mukherjee, had a candid chat with afaqs! during the first edition of Startup Brands Summit partnered by ZEE Media (Gold Partner) and Qoruz (Influencer Marketing Partner). He talked about the struggle behind the success of his entrepreneurial journey and what has made SUGAR Cosmetics a household name now.

Edited excerpts:

What were some big learnings from the initial years of your entrepreneureal journey that you used to build SUGAR Cosmetics?

My first startup was an online insurance company. While it has got nothing to do with SUGAR, I realised that when we started selling insurance online, our only objective was to bypass the middle layer and reach out to the consumers directly, i.e., direct-to-consumers (D2C).

At that time, we were not thinking about building a brand. We just wanted people to use our products. Although my first startup lasted for just two years, one thing I took from it is that there is merit in reaching out, and communicating about the product, to the consumers directly. That is what we attempted when we started the current business.

When we ideated and launched our first product, we didn’t know whether it would become a brand. But we were quite clear about what product to launch. We have been successful, thus far.

As a D2C brand, digital marketing and utilising all the online mediums, become crucial. But the online game is constantly changing, as algorithms are now controlling brands. How do you reach out to your target audience on these platforms now?

Whatever one excels in, they can’t bank on that for too long, because either they will lose the arbitrage and everybody else is going to crack the code, or the algorithm will change. The way we look at it is, how do we build awareness, because the idea isn’t to just focus on sales.

In India, brands aren’t purchased by the consumers, but are chosen by them. And eventually, for every product a brand sells, the consumers always have alternatives. So, the consumers are choosing to buy your brand, because it makes them feel something about it.

In that market, it’s impossible for a brand to play the price game forever. Brands just have to be in the consideration set of the audience. So, when people think about your product category, they will think about your brand. In that quest of building awareness, when one doesn’t have television, print or radio, brands go digital. We were fortunate because at that time, the Instagram algorithm wasn’t as brutal. We took an early call and tried to dominate the space.

It’s so easy to get carried away on platforms like Instagram, once a brand gets an active following. Most of them start pushing offers. One of the early decisions that we took, was that we aren’t going to push sales on Instagram. All our competitors are doing it. What we did, instead, was that if we wanted to push an offer or a campaign, we put that out in our Instagram stories. Because stories are not barging into the followers’ feed.

Another common mistake that brands make, is that they post the same content across every platform. But all these platforms function differently. This has helped us a lot and, today, we have scaled our Instagram following to 2.3 million.

The team that is driving awareness on social media, doesn’t have any revenue targets. It’s accountable for getting views, impressions and engagement. It has its own metrics, but it is not responsible for sales. We have two very different teams. Everything’s measured by different metrics and not everything about brand building involves sales.

SUGAR Cosmetics has a large network of retail stores - about 40,000-plus and more than 100 EBOS. Where do the majority of your sales come from? And, is digital just for the brand building?

Retail makes 55% of our overall sales. In India, beyond a point, if a brand has to scale, retail will scale faster, because there are limited online channels that a brand can sell on.

For every brand, it starts and ends with building trust. So, if the consumers trust a third-party platform, like a local general store or a beauty store more, we will let them shop SUGAR products from wherever they are comfortable shopping from.

Hence, we started with a D2C brand and then partner portals, modern trade and general trade came into the picture. And, eventually our own brand outlets that have also scaled very profitably.

In your TEDx Talk, you said that you set goals that no one expects you to achieve, and then you work towards that impossible goal. For SUGAR Cosmetics, what is that impossible goal that it’s working towards?

For SUGAR, there is a very clearly communicated goal within the organisation - that by FY25, we want to go public. And, we want to be India’s number one colour cosmetic brand. India's largest colour cosmetics brand is attainable. It is something we want to push ourselves to achieve over the next 2-3 years.

Since we want to go public, we don’t have the liberty of making deep losses, as we scale. But I think that the brand is scaling well. One lever, which we were not able to access for the first five years, was television. Now, that is being unlocked, finally.