Bharat revives demand for Nykaa, Sugar Cosmetics | Economic Times

Online brands, startups and marketplaces focused on the beauty and cosmetics sector like Nykaa Brands, Sugar Cosmetics, Wow Skin Science and Juicy Chemistry, among others, have seen demand revive to pre-Covid-19 levels through their online channels, on the back of "revenge shopping" and increased demand from small cities, following a drop of 70-80% in their business during the initial months of the nationwide lockdown.In some instances, sales in July of make-up products like lipsticks and foundations - which had been severely impacted between March and May -- have even outdone February sales numbers.Tier 2 and Tier 3 cities are largely driving the demand, as the lockdown has eased considerably there, while certain pockets in metros -- where people are decking up for virtual events like Zoom parties and Instagram videos - are also seeing a spike in orders.The renewed demand for make-up products has made Sugar Cosmetics revise its revenue targets for the ongoing fiscal year."Due to Covid-19, we had brought down our revenue projections for this year to Rs 130 crore from Rs 200 crore. Now, we are hoping to clock in Rs 150-160 crore as business is picking up again," said Vineeta Singh, CEO of Sugar Cosmetics.It has been a complete "V-shaped recovery" for beauty brand Wow Skin Science, co-founder Manish Chowdhary told ET. "Demand grew 2.5 times the pre-Covid-19 months in June-July," he said. 77189607Natural cosmetics brand Juicy Chemistry has seen a similar trend play out."In April, demand fell to 30% but that was predominantly because e-commerce was not in operation. In May, we were back to our regular business numbers. Then in June, we saw a 100% jump in sales, and this month it's a jump of 150% compared to the pre-Covid-19 period," said Megha Asher, cofounder of the Coimbatore-based company.Though offline retail has not yet picked up, players like Nykaa Brands -- beauty marketplace Nykaa's private label -- have been able to recover losses from retail sales for the period through increased online sales, said Reena Chhabra, CEO of Nykaa Brands.In an interview with ET last month, Nykaa CEO Falguni Nayar said it had switched to a 100% prepaid model during the lockdown months. For the first few months of the lockdown, "we were allowing orders only above Rs 1,500, and that helped make a huge improvement in our Average Order Value (AOV), which has now gone up by 30-40%, both in our physical as well as e-commerce businesses," Nayar had said. 77189572At online cosmetics store Purplle, "categories like skincare, haircare, bath and body are up by 50-70% compared to February, while make-up orders are back to pre-Covid-19 levels," said Manish Taneja, the company's cofounder.Last-mile delivery is, however, a challenge in many areas as some pin codes are in containment zones, he added.Nykaa's Chhabra attributed the sudden spike in demand for beauty products to "revenge-shopping" - a phenomenon where consumers tend to overspend on certain items after being deprived of those. "Make-up is a cost-effective indulgence for many," said Taneja of Purplle.Hindustan Unilever, one of the largest players in the beauty category, did not respond to ET's query on recovery in the cosmetics category till press time on Sunday.(This story is part of a series of articles in association with Facebook. Facebook has no editorial role in this story.)