An early player in the vegan niche for skincare, homegrown D2C beauty and skincare brand Plum Goodness is eyeing crossing the Rs 500-crore mark in its revenue soon. Talking to DH’s Shakshi Jain and Anjali Jain, the company’s founder Shankar Prasad, delves into the challenges of pulling off a strictly vegan brand and evolution of the skincare market in India.
What are the challenges of selling vegan cosmetic products?
The science of beauty and personal care has progressed and is progressing in a direction where I don't need animal sources of certain raw materials. I have either plant sources or synthetic sources - for example, petroleum or other mineral sources which are not animal sources of raw materials. So the beauty and personal care industries are evolving away from using animal sources. Hence, it's relatively easier and thankfully, as a consumer, you will not notice much of a difference when it comes to the user experience, compared to let's say, food, where you do.
Whatever is directly animal derived, it's easy to spot. For example, milk. But what if I tell you that it is a certain pigment that is animal derived? You don't even know, right? So I think the challenge is really to get back into the value chain of each of these raw materials and say where is it actually derived from and to that extent, you will have to work with all of your ingredient manufacturers, your finished goods manufacturers, to make sure that end to end there is traceability on where the material has been sourced from. And there have been cases where we had to let go of good raw materials, because it is from animal source. We have told them to sort of change the source and come back to us - that sometimes takes time. It is also sometimes more expensive. It is sometimes more technically challenging. You have to overcome all of these to make sure that you are true to what you're promising, which is - when you say vegan, you're saying there is nothing animal derived, even indirectly.
State some trends that you see dominating the skincare segment in India this year.
So skincare wise if you see first and foremost is people are falling in love with actives. Earlier this market was a very herbal dominated market but now people are genuinely experimenting and falling in love with actives. And that is also the largest fastest growing segment in the market.
The second is formats, people are taking to lighter formats like serums, essences, toners, gel moisturisers, sunscreen gels. So people are preferring lighter and more easily absorbing formats compared to heavier creams and lotions.
The third trend that we are seeing is people mixing and matching lately. The pendulum swings from let's say a very simple CTM (cleansing-toning-
What are your domestic expansion plans?
On the expansion front, a year from now, what will delight me is maybe close to 100 exclusive outlets, 3,000 assistant outlets, and 1.5 lakh unassisted outlets. Now this is what we're setting out to do and hope is that we will get close to all of these numbers in a year's time.
I am agnostic to how many cities we go to because the good news is, online is reaching 20,000 pin codes already for all of the players.
Where do you picture your first store outside of India and when?
We will definitely not open exclusive stores outside of India anytime soon. We are taking the distribution road because there is a lot of consumer understanding, market understanding that remains to be done. Where we are definitely seeing traction is trade partners taking our brands to the right segment in specific geographies and by specific geographies, I mean, parts of Southeast Asia - Philippines, Indonesia; parts of the Gulf - Dubai and later surrounding countries; parts of Africa. We have distributors in some of the Eastern African countries who are showing a lot of interest and in fact, are also taking things forward. And of course, countries surrounding India -Nepal, Bangladesh, Sri Lanka. So these are all areas where we are moving forward and we are seeing business come in - very small currently but again, we are not trying to artificially push anything.
It is a mix of online and offline, but largely offline at the moment.
Walk us through Plum’s revenue journey?
The break even happened in FY16. And revenue wise, we've pretty much doubled every year since FY17. And last year (FY23) was also very close to double. This year, of course, on a larger base, we are not aspiring to double, but we're trying to get as close as possible to that. The shorter term aspiration is to well and truly remain about the Rs 500 crore run rate, we are very close to that right now.
What is your current customer base and the overall target for 2023?
The customer base is just short of a million right now and I'm counting only the online base. Anywhere between one and two million is where I'd love to get very soon, two million is probably the number for this year.
What is your outlook for the skin care segment in the retail space in India this year?
In terms of per capita consumption, you will be surprised that even compared to countries like Bangladesh and Indonesia, India’s per capita consumption is lower. So, on that front, we are very, very far away from getting anywhere close to the world average.
But people are seeking more premium experiences. The market is certainly premiumising - not as fast as one would expect - but it is definitely happening. The second is the number of sub segments of subcategories. For example, 20 years back face wash also was a question mark, they were largely using soap and a cream. But then face wash came, toners came in, serums, sunscreens, night cream and eye cream followed. So the number of sub segments that people are beginning to get comfortable with is again very high, yet not close to global averages. So there is only one way this can go, which is people experimenting and sticking to newer categories.
The retail industry - growth wise, of course, there is a lot of competition from online when we talk about the offline side of things, but overall, if I take them both together, then 15 to 20 per cent growth rate in value terms over the next year looks very achievable for the industry. I think continuing that growth momentum over the next year or two is not going to be a problem at all.