Fast Moving Consumer Goods(FMCG) companies have switched from traditional marketing to digital marketing. These companies are taking the advantage of e-commerce and social media platforms to reach their consumers. Influencer marketing is another popular method applied by the FMCG sector. It is quick and reaches the right audience. Conversion rate is also very high.
Mamaearth, the natural and toxin-free skincare products provider, has grown rapidly with its mastering of influencer marketing.
Mamaearth is known for its marketing campaigns over different social media platforms. Noted YouTube Vlogger, Instagram Influencers, and other social media known personalities are the backbones of Mamaearth.
Financial Details of Mamaearth in FY20
The company has grown rapidly in the last 4 years. The fiscal Year 2020 is like a dream come true for Mamaearth. In FY19, Mamaearth clocked a total revenue of Rs 16.8 crore. This number has grown to Rs 110 crore in FY20 with 6.5x whopping growth.
This magical growth came when Mamaearth spent the maximum on advertisement and marketing. 39% of the FY20 expenses were dedicated to ads and marketing campaigns. If we compare these numbers with FY19, there is a 5.3x surge in the advertisement and marketing department. In FY20, the company invested Rs 48 crore that is more than five times to Rs 8.69 crore invested in FY2019 over ads.
The company bought stock worth Rs 50.55 crore during FY20, ballooning 7.3X from purchases of only Rs 6.93 crore made in FY19. With an inventory turnover of 14.57X, the company fulfills its inventory every 25 days with decent turnaround times.
Mamaearth saw a surge in cargo and transport expenditure to Rs 15 crore that is approximately 6 times compared to last fiscal year. It increased due to more demands of its products.
Sales commission provided to the third parties also grew to Rs 3.4 crore. More than 10 times jump in the sales commission tells the success of Mamaearth products.
The company is utilizing the latest IT infrastructure properly. It invested Rs 1.3 crore on IT-related services. Overall, Mamaearth expenditures stand tall with a whopping amount of approximately Rs 118 crore in FY20. It is 5.5 times more than the expenses of Rs 21.41 crore in FY19.
Mamaearth observed total losses of Rs 5.9 crore that is approximately 70% more than the losses in FY19. These numbers are still better than other startups of the same age.
Funding and Mamaearth’s Journey Details
The company was founded by couple Gazal and Varun Alagh. It operated on a concept of minimal capital assets. The company buys all its merchandise from outsiders.
Varun and Ghazal were expecting their first child. They searched for natural products for their baby. To their surprise, most of the products were full of chemicals. They started importing baby products from the USA. Importing from the US became very costly. That is how they started natural products company to solve this issue.
Mamaearth is the only Asian startup with ‘MADE SAFE’ certification. Varun Alagh, the founder of Mamaearth, has worked in the FMCG industry. He also worked with top-rated companies like Coca Cola and Hindustan Lever. He is including those reach experiences in his startup. His wife Ghazal Alagh earlier worked as a corporate trainer in IT sector.
Mamaearth uses Direct to consumer platforms like Amazon, Flipkart to reach its targeted audience. The company also sells products through its own website.
Mamaearth raised a total of $23.3 million in five rounds of funding. Sequoia Capital is the main investor in Mamaearth. With its last round of funding, Mamaearth valuation stands at Rs 700 crore in January 2020.
Mamaearth won “one of the best brands” in India award by ET brand festival in 2019. As per the latest reports through different media portals, Sequoia may invest $20-30 million more that will make the Mamaearth valuation worth Rs 2000 crore.
