Fortune India TheNext500: Mamaearth's focus is on customers, says Ghazal Alagh

Back in 2016 when launching a new FMCG product line meant a huge investment, Mamaearth opted for micro-marketing by targeting a small sliver of consumers via digital marketing, according to Ishaan Mittal, managing director, Peak XV Partners.

"In 2016, nobody was talking about how FMCG branding can be done. Everybody was spending ₹500 crore on a brand campaign. This meant that the cost of innovation was very high. Launching a new product line meant a huge investment. It actually became a barrier to new investments. Mamaearth changed it to micro-marketing by targeting a small sliver of consumers via digital marketing. That brought down the cost of innovation and brought down the cost of access to consumers," Mittal says, adding the largest part of Mamaearth's revenue came from their website.

Mamaearth is using technology to break the barriers and the myths of the core pillars of the industry, says Mittal. "In an FMCG industry, we believed the product, the distribution and the marketing are the three core pillars. Ghazal and Varun completely changed the landscape," explains Mittal.

"We came in as investors in 2019. Varun and Ghazal started the business at the end of 2016. We became investors two and a half years too late. We would have loved to be investors from Day 1. In 2019, the business was close to ₹100 crore in revenue. The business was growing very fast. We could see that while it has achieved a lot, it is still Day 1 for the business. Varun and Ghazal had laid the foundation right," says Mittal.

On product, instead of this long one-year product cycle which was driven by the R&D teams based on gut, they made this data science-driven – they built the business consumer first, Mittal says, adding it meant a lot of innovation, faster turnaround of the product.

On the idea of starting a baby care brand, Mamaearth founder Ghazal Alagh says she was looking for safe and toxin-free products for her son and couldn't find any in India.

"Ingredients that were used for adult skin were being used for baby skin as well. At some point of time, we were also wondering why there is no brand that is listening to consumers like us. We were not getting what we were looking for. If there was any brand that was listening, we would have given them our problem and requested them to solve it. We said if nobody else is doing anything about it, there is something we can do," says Ghazal.

"When we started Mamaearth, our entire focus was on consumers. It was not on competition, not on category size, not on what somebody else is doing," Ghazal adds.

Almost all multinationals were importing for India rather than crafting for India, says Mamaearth co-founder Varun Alagh.

"Indian tropical weather did not require heavy creams. We need light hydration. If we have to build for India, we have to build for the Indian consumers," Varun says.

"Early on when we used to meet a lot of investors, they used to scare us by telling us that it is a very competitive market and there are so many large players. How can you beat them?" says Varun.

"We just kept focused on consumers and that became our DNA. When we are listening to consumers.. they said we would like to buy products for ourselves and that's how we expanded into categories like adult care," Varun adds.