Healthy bias towards deploying marketing capital in media where targeting & segmentation is sharper: Plum founder

Plum, a direct-to-consumer (D2C) beauty and personal care brand, which turned 10 years old in July 2024, understood itself pretty early in its life – a clean brand that does not use animal ingredients and neither tests its products on animals.

Brand positioning is a delicate art. Get it right, and you naturally stand out; get it wrong or even a little to the left or to the right of where your brand stands, you risk confusing your consumers and possibly losing them along the way.

The Indian beauty and personal care market is filled with players, with data platform Statista saying it is projected to generate a revenue of Rs 3,150 crore in 2024 and will witness an annual growth rate of 3% till 2028.  

Plum, in this market, competes not only with other D2C brands like Mamaearth, MyGlamm, and WOW Skincare but also with legacy players such as Nivea and Lakme.

Thanks to technology, a supportive entrepreneurial culture, and improved supply chain logistics, entry barriers in this market compared to a decade ago are narrower. As more players enter, whether brand positioning becomes more necessary than ever or if it is now an obsolete notion becomes a crucial question.

“The spaces that are available to create differentiation are narrower now. But that means brand (positioning) becomes more important than it was,” says Shankar Prasad, founder, Plum. He spoke to us (afaqs!) as the company celebrated its tenth anniversary.

D2C’s unrealised love for television?

“When we were younger, we used to dream of advertising on TV,” remarks Prasad when the conversation revolved around the lack of television advertising from Plum.

Most D2C brands would love to, but do not advertise on television, during their early years because it is not affordable for them. Digital advertising, on the other hand, is the most affordable option with the added benefit of targeted advertising.

GroupM’s TYNY report earlier this year said digital will lead the share of India’s Rs 1,55,386 crore ad spend at 57%, up from 2023’s 56%. Following it will be television with a share of 29% of India’s ad spending pie.

“There is a healthy bias towards deploying marketing capital in media where targeting and segmentation is sharper,” admits the founder, and says it pushes mass media options like television further down the priority chain.

Such an admission is disappointing for television advertising because Plum, the founder says, can afford to advertise on the big screen today, but will not because “it is seeing results with targeting and getting better ROI.” He further presents connected TV as an alternative to reach urban audiences.

Also, the D2C brand is upping its ad spending by 60%-70% in the second half of the year for the festival season which starts in August – many say the Independence Day and Raksha Bandhan long weekend is the kick-off.

“As the sales season enters, a lot more capital will be deployed into the online marketplaces (Amazon, Flipkart, Nykaa, among others) themselves because that's where the action is happening,” he reveals.

Whilst being an online company first, Plum also has an offline presence having opened its first store in 2021. As per ET, it operates in over 300 cities, has 36 exclusive outlets, around 1,500 assisted outlets, and over 10,000 unassisted outlets including pharmacies and supermarkets.

“We are roughly two-thirds, one-third. Two-thirds online, one-third is offline,” quipped Prasad when asked about where people are buying.

Geographical segmentation falls down the pecking order

With all the targeting tools at its disposal and the influx of affordable data plans and smartphones, one can assume Plum’s consumer base to have spread to India’s Tier II and III regions, and not stay restricted to India’s top 10 cities.

Prasad agrees with the spread of his consumer base, but he says “the segmentation that is going to matter more and more is socio-economic and the second is psychographic and behavioural, rather than geographical.”

Access to information, content, device quality, and the quick delivery of products has led to a homogenisation of trends and products consumers seek, he believes, and that it is faster than one can imagine.

Another factor on his mind is how he can leverage physical distribution in these regions as well as he does with his brands' online reach. “In a Tier II or III city, where my physical distribution is not as strong as online, I would be a little careful before I deploy it.”

Ask him about quick commerce (q-comm) in these regions, he is quick to say that habit is yet to form because the dark stores are not available in a uniform manner across these cities and towns. “It will take some more time. Metros have obviously positively surprised everybody with their adoption.”

Why are most official Plum stores at malls?

Use the ‘Store Locator’ option on Plum’s website and you will realise most if not all of the stores are at shopping malls, and it is naturally by design.

One, the crowd that walks into malls is the kind of consumers the brand wishes to target. Second, “From a pure rental efficiency perspective, in terms of the footfalls versus the rent that I'm paying, I get a lot more fit with my target,” states Prasad.

High street, on the other hand, has extremely high rentals, and “you are competing with pretty much every class of retail product or service, including an ATM, a bank, maybe a travel shop. And the rents, therefore, are little, sometimes not linked to reality.”

The question of PHY

While beauty and personal may immediately conjure images of a woman-only brand, it is far from the truth. Plum knew it and had a line for men called PHY.

Prasad feels men, when compared to women, care for themselves in different ways. “Men are more interested in the benefit than the ingredient. Women lean towards being told what ingredient it is, rather than what it does,” explains Prasad. He also says men are more attracted to gel, deodorant, and fragrance categories because they have more instant gratification products.

On the future of PHY, “we are reorienting more in the direction of meeting the confidence needs of men when it comes to personal care every day, rather than the inner care. Not that inner care is not important, but somewhere the orientation is not there towards that care here,” revealed Prasad.